Bobcat Printingmakes customt---shirts and other promotional productsforstudent organizations and ... Bobcat Printingmakes customt---shirts and other promotional productsforstudent organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales are budgeted at $30,000 for Month 1, $32,500 for Month 2, and $34,000 for Month 3. All sales will be done on account. Company does not expect to have any cash sales. b. Sales are collected 50% in the month of the sale, and 50% in the month following the sale. c. Cost of Goods Sold is budgeted at 40% of Sales. d. Monthly selling, general, and administrative expenses are as follows: donations are 10% of sales; advertising is 3% of sales; miscellaneous is 1% of sales; and rent is $5,000 per month. All SG&A expenses are paid in the month they are incurred. e. Since all of the orders are custom made, no inventory is kept on hand at the end of the month. f. Inventory purchases are paid in full in the month following the purchase. g. Bobcat Printing is planning to purchase a building in Month 3 for $8,000 in cash. h. They would like to maintain a minimum cash balance of $2,500 at the end of each month. The company has an agreement with a local bank that allows them to borrow, with a total line of credit of $20,000. The interest rate on these loans is 1% per month (12% annual). They would as far as able, repay the loan on the last day of the month when it has enough cash to pay the full balance and maintain an adequate ending cash balance. i. The owner makes a draw of $5,000 every month. (Note: sole proprietors and partnerships take owners draws, while stockholders receive dividends). Based upon the information provided, complete the operating budgets provided in the excel template, and answer the questions in TRACS. When making calculations always round up (for example: 33 7% = 2.31, round up to 3.00). Check Figures: Gross Margin $57,900 Total assets $27,973 Ending Retained Earnings $14,373

6 .What is the total budgeted Cost of Goods Sold for the first quarter of operations? A. $18,600 B. $12,000 C. $25,000 D. $38,600

7 . To what can we attribute the difference between budgeted cost of goods sold and projected cash payments for inventory in the first quarter of operations? A. Bobcat Printing sells its inventory in the month of purchase, and pays for its inventory one month following purchase. B. Customers do not pay for the goods it purchases until 30 days after the date of purchase. C. Due to the Matching Concept, cash sales require payments for inventory in the month they occur. D. There is no difference between the cost of goods sold and cash payments

8 . What is another name for cost of goods sold? A. Period cost B. Capitalize cost C. Overhead cost D. Product cost

9. What is the total budgeted SG&A expense for the quarter? A. $28,510 B. $9,200 C. $13,440 D. $7,440

10. What is the total projected cash payments for SG&A expense? A. $9,760 B. $28,510 C. $13,440 D. $4,800

11. Why are there no A/R cash collections during the first month of the Sales Budget? A. It is the first month of operations, so there are no prior credit sales. B. There should be A/R cash collections for the first month of the Sales budget. C. Due to the cash method, cash collections from A/R do not begin until the second month of the quarter. D. None of the above are true.

12. What is the projected beginning cash balance for Month 1? A. $0 B. $7,500 C. $300 D. $2,500

13. What is the projected ending cash balance for Month 1? A. $2,500 B. $1,100 C. $8,000 D. None of the above.

14. Will Bobcat Printing need to borrow money in Month 1? A. Yes B. No

15. If you answered "Yes" that Bobcat Printing had to borrow money in the first month, how much money will it need to borrow to ensure it does not have a cash shortage? A. $1,700 B. $1,400 C. $500 D. Bobcat Printing does not borrow in the first month.

16. If Bobcat Printing borrowed money in Month 1, what is the projected interest expense it will incur for borrowing the money? A. $140 B. Bobcat Printing will not have interest because it does not need to borrow money in Month 1. C. $17 D. $170 E. $14

17. Bobcat Printing will have a cash surplus in Month 2. True False

18. If Bobcat Printing has a projected cash surplus in Month 2, how much cash will it repay for borrowing on its line of credit? A. Bobcat Printing will not have a cash surplus, therefore it will need to borrow more money in Month 2. B. $1,100 C. $1,700 D. $1,400

19 . Bobcat Printing will need to borrow money in Month 3. True False

20. If Bobcat Printing is projected to have a cash shortage in Month 3, how much is the shortage? A. Bobcat Printing will not have a projected cash shortage in Month 3. B. $1,905 C. $1,250 D. $2,205

21. If Bobcat Printing has a projected cash shortage for Month 3, how much will it need to borrow? A. $13 B. $19 C. $150 D. Bobcat Printing will not have a projected cash shortage in Month 3.

22 . What is the projected gross profit for the first quarter of operations? A. $32,500 B. $27,900 C. $29,300 D. $57,900

23 . What is the projected interest expense for the first quarter of operations? A. $170 B. $14 C. $34 D. $17

24 . What is the projected net income the first quarter of operations? A. $14,446 B. $7,650 C. $13,200 D. $29,373

25. What is the projected beginning capital investment for the first quarter of operations? A. $0 B. Cannot be determined C. $3,985 D. $1,500

26 . What is the projected total owner's equity for the first quarter of operations? A. $14,373 B. $6,240 C. $2,973 D. $12,000

27. What is the projected ending cash balance for the first quarter of operations? A. $12,846 B. $2,973 C. $0 D. $3,846

28 . What is the projected accounts receivables balance for the first quarter of operations? A. $17,000 B. $8,400 C. $6,250 D. $14,200

29 . What is the projected account payable for the first quarter of operations? A. $13,600 B. $9,100 C. $8,000 D. $6,400

30 . What is the projected interest payable for the first quarter of operations? A. $0 B. $14 C. $19 D. $34

31. Points What is the projected net cash flow from operating activities for the first quarter of operations? A. $0 B. $14,446 C. $12,846 D. $25,973

32 . What is the projected net cash flow for investing activities for the first quarter of operations? A. ($3,000) B. $8,000 C. ($8,000) D. $3,000

33. What is the projected cash flow from financing activities for the first quarter of operations? A. ($15,000) B. $15,000 C. $1,700 D. ($1,700) E. ($16,700)