ACCT 1020

2 Practice i SE The information given below is the Browns Company's beginning balance sheet, estimates and policies, and the partially completed Master Budget for July and August. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets Browns Company Balance Sheet As of June 30 202X LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities $ 5.000 Accounts Payable $11,000 15,000 Commissions Payable 1.300 11,000 Income Taxes Payable 3.500 1,600 Dividends Payable 32,600 Total Current Liabilities 15,800 70,000 Property Plant & Equipment Land Equipment Accumulated Depreciation Net PP & E 60.400 74.000 (22.000 112,400 Long-term debt Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & SE 49 200 10,000 59,200 Total Assets $ 145,000 $ 145,000 1. Expected sales are $48,000, 562,000, and $84,000, respectively in July, August, and September. All sales are on credit 2. The company collects 75% of sales in the month of the sale and 25% in the month after the sale. 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 80% of its purchases in the month of 1. Expected sales are $48,000, $62,000, and $84,000, respectively in July, August, and September. All sales are on credit. 2. The company collects 75% of sales in the month of the sale and 25% in the month after the sale. 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 80% of its purchases in the month of the purchase and 20% in the month after the purchase. 6. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned 7. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 8. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation $900 per month 9. On May 1 the company purchased an insurance policy covering 24 months for $12,000. 10. The company pays interest on its long term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month 11. On July 10 the company will pay cash for Land, costing $12,000 12. On July 27 the company will declare a cash dividend of $5,000 and will pay it in August, 13. The company requires a minimum cash balance of $5,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments. Browns Company's partially completed master budget is as follows: Soles Budget July August September Credit Sales $ 48,000 $ 62,000 $84,000 Cash Receipts Browns Company's partially completed master budget is as follows: Sales Budget July $ 48,000 August September $ 62,000 $84.000 Credit Sales bed Cash Receipts From Current Month Credit Sales From Prior Month Credit Sales Total Cash Receipts from Customers ook 60. (Click to select) $ 58,500 rences Inventory Purchases Budget July August $34,100 September $46.200 COGS Desired Ending Inventory Total Inventory Needed Beginning Inventory Inventory Purchases (2) (Click to select) 36,520 Cash Payments For Current Month Purchases For Prior Month Purchases Total Cash Payments for Inventory Purchases 25,296 11,000 (3) $36,296 (Click to select) Selling & Adminstrative Expenses Budget July August Variable Selling & Administrative Expenses Commissions Utilities Total Variable Selling & Administrative (4) (Click to select) 1.920 24801 Selling & Adminstrative Expenses Budget July August Variable Selling & Administrative Expenses Commissions (4) (Click to select) Utilities Total Variable Selling & Administrative Expenses 1.920 2.480 Fixed Selling & Administrative Expenses Utilities Advertising Salaries Depreciation 1.100 1,400 900 es 1.100 1,400 900 (5) (Click to select) 4.200 Insurance Total Fixed Selling & Administrative Expenses 4,200 Cash Payments Commissions Utilities Advertising Salaries Depreciation 920 1100 1.400 780 1.100 1.400 (6) (Click to select) (7) Click to select) Insurance Total Cash Payments for S&A Expenses $4,860 Cash Budget July August Beginning Cash Balance Cash Receipts from Customers Total Cash Available 58.500 56,000 Cash Budget July August Beginning Cash Balance Cash Receipts from Customers Total Cash Available 58,500 56,000 Cash Payments For Inventory Purchases For S&A Expenses 36.296 For Interest 18) (Click to select) 3,500 3,695 5 For Income Taxes For Land Purchase For Dividends Total Cash Payments 57,076 Surplus (Deficit) Borrowings (Repayments) nding Cash Balance (9) 14,559 (Click to select) (10) 7,000 (Click to select) 5,000 Income Statement July $48,000 August $62,000 Sales Less: Variable Expenses COGS Total Variable S&A Expenses Contribution Margin Less Fixed Expenses Total Fixed S&A Expenses Interest Expense Pre-tax Net Income Income Taxec Finance 254 (11) (Click to select) 14.780 3695 20.450 5112 domini am #2 Practice lotai Lasn Payments 57,076 Surplus (Deficit) 9) 14,559 (Click to select) 7.000 |(10) (Click to select) 5,000 Borrowings (Repayments) Ending Cash Balance Income Statement July $48,000 August $62,000 Es Sales Less: Variable Expenses COGS Total Variable S&A Expenses Contribution Margin Less: Fixed Expenses Total Fixed S&A Expenses Interest Expense Pre-tax Net Income Income Taxes Expense (25%) Net Income (11) (Click to select) 14,780 3,695 $11,085 20,450 5,113 $15,338 Balance Sheet Balance Sheet Assets Current Assets ses Cash Accounts Receivable July August July August Liabilities & SE Current Liabilities (18) K12) (Click to select) Accounts Payable $6,324 (Click to select) 12,000 13) (Click to select) Commissions (19) (Click to select) Payable (14) Click to select) Income Taxes Payable (15) Click to select) Dividends Payable (20) Click to select) Total Current Liab Long-term Debt (21) (Click to select) Prepaid Insurance Inventory Total Current Assets Property. Plant & Equip Equipment Land Accumulated Depreciation NEPPEE Stockholders 74.000 74 000 Equity (16). Click to select) Common Stock (17) Cack to select) Retained Earnings 49.200 49,200 (22) [Click to select) Total SE Total Assets $ 158,744 $ 162340 Total Liabilities & SE $ 158744 $162 340 2 Practice i SE The information given below is the Browns Company's beginning balance sheet, estimates and policies, and the partially completed Master Budget for July and August. Use the information to answer the 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. ASSETS Current Assets Cash Accounts Receivable Prepaid Insurance Inventory Total Current Assets Browns Company Balance Sheet As of June 30 202X LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities $ 5.000 Accounts Payable $11,000 15,000 Commissions Payable 1.300 11,000 Income Taxes Payable 3.500 1,600 Dividends Payable 32,600 Total Current Liabilities 15,800 70,000 Property Plant & Equipment Land Equipment Accumulated Depreciation Net PP & E 60.400 74.000 (22.000 112,400 Long-term debt Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & SE 49 200 10,000 59,200 Total Assets $ 145,000 $ 145,000 1. Expected sales are $48,000, 562,000, and $84,000, respectively in July, August, and September. All sales are on credit 2. The company collects 75% of sales in the month of the sale and 25% in the month after the sale. 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 80% of its purchases in the month of 1. Expected sales are $48,000, $62,000, and $84,000, respectively in July, August, and September. All sales are on credit. 2. The company collects 75% of sales in the month of the sale and 25% in the month after the sale. 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next month's cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 80% of its purchases in the month of the purchase and 20% in the month after the purchase. 6. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned 7. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 8. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation $900 per month 9. On May 1 the company purchased an insurance policy covering 24 months for $12,000. 10. The company pays interest on its long term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month 11. On July 10 the company will pay cash for Land, costing $12,000 12. On July 27 the company will declare a cash dividend of $5,000 and will pay it in August, 13. The company requires a minimum cash balance of $5,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments. Browns Company's partially completed master budget is as follows: Soles Budget July August September Credit Sales $ 48,000 $ 62,000 $84,000 Cash Receipts Browns Company's partially completed master budget is as follows: Sales Budget July $ 48,000 August September $ 62,000 $84.000 Credit Sales bed Cash Receipts From Current Month Credit Sales From Prior Month Credit Sales Total Cash Receipts from Customers ook 60. (Click to select) $ 58,500 rences Inventory Purchases Budget July August $34,100 September $46.200 COGS Desired Ending Inventory Total Inventory Needed Beginning Inventory Inventory Purchases (2) (Click to select) 36,520 Cash Payments For Current Month Purchases For Prior Month Purchases Total Cash Payments for Inventory Purchases 25,296 11,000 (3) $36,296 (Click to select) Selling & Adminstrative Expenses Budget July August Variable Selling & Administrative Expenses Commissions Utilities Total Variable Selling & Administrative (4) (Click to select) 1.920 24801 Selling & Adminstrative Expenses Budget July August Variable Selling & Administrative Expenses Commissions (4) (Click to select) Utilities Total Variable Selling & Administrative Expenses 1.920 2.480 Fixed Selling & Administrative Expenses Utilities Advertising Salaries Depreciation 1.100 1,400 900 es 1.100 1,400 900 (5) (Click to select) 4.200 Insurance Total Fixed Selling & Administrative Expenses 4,200 Cash Payments Commissions Utilities Advertising Salaries Depreciation 920 1100 1.400 780 1.100 1.400 (6) (Click to select) (7) Click to select) Insurance Total Cash Payments for S&A Expenses $4,860 Cash Budget July August Beginning Cash Balance Cash Receipts from Customers Total Cash Available 58.500 56,000 Cash Budget July August Beginning Cash Balance Cash Receipts from Customers Total Cash Available 58,500 56,000 Cash Payments For Inventory Purchases For S&A Expenses 36.296 For Interest 18) (Click to select) 3,500 3,695 5 For Income Taxes For Land Purchase For Dividends Total Cash Payments 57,076 Surplus (Deficit) Borrowings (Repayments) nding Cash Balance (9) 14,559 (Click to select) (10) 7,000 (Click to select) 5,000 Income Statement July $48,000 August $62,000 Sales Less: Variable Expenses COGS Total Variable S&A Expenses Contribution Margin Less Fixed Expenses Total Fixed S&A Expenses Interest Expense Pre-tax Net Income Income Taxec Finance 254 (11) (Click to select) 14.780 3695 20.450 5112 domini am #2 Practice lotai Lasn Payments 57,076 Surplus (Deficit) 9) 14,559 (Click to select) 7.000 |(10) (Click to select) 5,000 Borrowings (Repayments) Ending Cash Balance Income Statement July $48,000 August $62,000 Es Sales Less: Variable Expenses COGS Total Variable S&A Expenses Contribution Margin Less: Fixed Expenses Total Fixed S&A Expenses Interest Expense Pre-tax Net Income Income Taxes Expense (25%) Net Income (11) (Click to select) 14,780 3,695 $11,085 20,450 5,113 $15,338 Balance Sheet Balance Sheet Assets Current Assets ses Cash Accounts Receivable July August July August Liabilities & SE Current Liabilities (18) K12) (Click to select) Accounts Payable $6,324 (Click to select) 12,000 13) (Click to select) Commissions (19) (Click to select) Payable (14) Click to select) Income Taxes Payable (15) Click to select) Dividends Payable (20) Click to select) Total Current Liab Long-term Debt (21) (Click to select) Prepaid Insurance Inventory Total Current Assets Property. Plant & Equip Equipment Land Accumulated Depreciation NEPPEE Stockholders 74.000 74 000 Equity (16). Click to select) Common Stock (17) Cack to select) Retained Earnings 49.200 49,200 (22) [Click to select) Total SE Total Assets $ 158,744 $ 162340 Total Liabilities & SE $ 158744 $162 340