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Accounting QUESTION 5 1. Arnold Company Pty Ltd made these estimates for the three months ending 30 June 2010, its first period of operation. The

Accounting

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QUESTION 5 1. Arnold Company Pty Ltd made these estimates for the three months ending 30 June 2010, its first period of operation. The beginning cash balance is $1,000. Cash receipts from sales $300 000 Cash payments for expenses 130 000 Payment for the purchase of new motor vehicle 15 000 Depreciation of motor vehicle 15 000 Repayment of a loan 100 000 2. What is the estimated cash balance at 30 June 2010? a. $55000 deficit b. $155000 surplus c. $56000 surplus d. $50000 surplus e. $40000 surplus 1 points QUESTION 6 1. From the following data calculate the estimated cash received from credit sales during the month of May. Credit sales for March, $25 000; April, $30 000; May, $18 000. Credit sales are normally settled in the following pattern: 50% in the month of sale, 40% in the month following the sale, and 10% in the second month following the sale a. $12 000 b. $23 500 c. $9 000 d. $18 000 e. $21 000 1 points QUESTION 7 1. Carlon Lid currently manufactures 10,000 compressors per year in one of its production lines. The variable costs per unit are $50 and the total fixed costs of this production line are $250,000 per year. Robson Ltd has contacted Carlon Lid with an offer to sell to it 10,000 compressors for $48 each. If the compressors are purchased from Carlon Ltd a cost of $16,000 per year would be incurred for quality control. Assume the fixed costs are unavoidable. Should Carlon Lid make or buy the compressors? Why? a. Buy, because profit would increase by $4,000 b. Make, because if buy the compressors, profit would decrease by $4,000 C. Make, because if buy the compressors, there is no reduction in the current fixed costs d. Make, because if buy the compressors, the fixed cost increased by $16,000 e. Buy. because the current fixed costs will be reduced by $16.000

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