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13-82
93.
Kevin Montgomery Retail seeks your assistance to develop cash and other budget
information for May, June, and July. At April 30, the company had cash of $5,500, accounts
receivable of $437,000, inventories of $309,400, and accounts payable of $133,055. The
budget is to be based on the following assumptions:
SALES:
Each month's sales are billed on the last day of the month. Customers are allowed a 3%
discount if payment is made within 10 days after the billing date. Receivables are recorded
in the accounts at their gross amounts (not net of discounts). 55% of the billings are
collected within the discount period; 30% are collected by the end of the month; 9% are
collected by the end of the second month; and 6% turn out to be uncollectible.
PURCHASES:
60% of all purchases of merchandise and the marketing, general, and administrative
expenses are paid in the month purchased and the remainder in the following month. The
number of units in each month's ending inventory is equal to 125% of the next month's
units of sales. The cost of each unit of inventory is $30. Marketing, general, and
administrative expenses, of which $3,000 is depreciation, are equal to 15% of the current
month's sales.
Actual and projected sales are as shown below:
Dollars
Units
March
$472,000
11,800
April
$484,000
12,100
May
$476,000
11,900
June
$456,000
11,400
July
$480,000
12,000
August
$480,000
12,200
What are the budgeted merchandise purchases (in dollars) for June?
13-84
94.
Kevin Montgomery Retail seeks your assistance to develop cash and other budget
information for May, June, and July. At April 30, the company had cash of $5,500, accounts
receivable of $437,000, inventories of $309,400, and accounts payable of $133,055. The
budget is to be based on the following assumptions:
SALES:
Each month's sales are billed on the last day of the month. Customers are allowed a 3%
discount if payment is made within 10 days after the billing date. Receivables are recorded
in the accounts at their gross amounts (not net of discounts). 55% of the billings are
collected within the discount period; 30% are collected by the end of the month; 9% are
collected by the end of the second month; and 6% turn out to be uncollectible.
PURCHASES:
60% of all purchases of merchandise and the marketing, general, and administrative
expenses are paid in the month purchased and the remainder in the following month. The
number of units in each month's ending inventory is equal to 125% of the next month's
units of sales. The cost of each unit of inventory is $30. Marketing, general, and
administrative expenses, of which $3,000 is depreciation, are equal to 15% of the current
month's sales.
Actual and projected sales are as shown below:
Dollars
Units
March
$472,000
11,800
April
$484,000
12,100
May
$476,000
11,900
June
$456,000
11,400
July
$480,000
12,000
August
$480,000
12,200
What are the budgeted cash disbursements during the month of June?
13-86
95.
Kevin Montgomery Retail seeks your assistance to develop cash and other budget
information for May, June, and July. At April 30, the company had cash of $5,500, accounts
receivable of $437,000, inventories of $309,400, and accounts payable of $133,055. The
budget is to be based on the following assumptions:
SALES:
Each month's sales are billed on the last day of the month. Customers are allowed a 3%
discount if payment is made within 10 days after the billing date. Receivables are recorded
in the accounts at their gross amounts (not net of discounts). 55% of the billings are
collected within the discount period; 30% are collected by the end of the month; 9% are
collected by the end of the second month; and 6% turn out to be uncollectible.
PURCHASES:
60% of all purchases of merchandise and the marketing, general, and administrative
expenses are paid in the month purchased and the remainder in the following month. The
number of units in each month's ending inventory is equal to 125% of the next month's
units of sales. The cost of each unit of inventory is $30. Marketing, general, and
administrative expenses, of which $3,000 is depreciation, are equal to 15% of the current
month's sales.
Actual and projected sales are as shown below:
Dollars
Units
March
$472,000
11,800
April
$484,000
12,100
May
$476,000
11,900
June
$456,000
11,400
July
$480,000
12,000
August
$480,000
12,200
What are the budgeted cash collections during the month of May?
13-88
96.
Kevin Montgomery Retail seeks your assistance to develop cash and other budget
information for May, June, and July. At April 30, the company had cash of $5,500, accounts
receivable of $437,000, inventories of $309,400, and accounts payable of $133,055. The
budget is to be based on the following assumptions:
SALES:
Each month's sales are billed on the last day of the month. Customers are allowed a 3%
discount if payment is made within 10 days after the billing date. Receivables are recorded
in the accounts at their gross amounts (not net of discounts). 55% of the billings are
collected within the discount period; 30% are collected by the end of the month; 9% are
collected by the end of the second month; and 6% turn out to be uncollectible.
PURCHASES:
60% of all purchases of merchandise and the marketing, general, and administrative
expenses are paid in the month purchased and the remainder in the following month. The
number of units in each month's ending inventory is equal to 125% of the next month's
units of sales. The cost of each unit of inventory is $30. Marketing, general, and
administrative expenses, of which $3,000 is depreciation, are equal to 15% of the current
month's sales.
Actual and projected sales are as shown below:
Dollars
Units
March
$472,000
11,800
April
$484,000
12,100
May
$476,000
11,900
June
$456,000
11,400
July
$480,000
12,000
August
$480,000
12,200
What are the budgeted number of inventory units that need to be purchased in July?
97.
Jackson Company has developed the following sales projections for the calendar year:
May
$100,000
June
120,000
July
140,000
August
160,000
September
150,000
October
130,000
Normal cash collection experience has been that 50% of sales is collected during the
month of sale and 45% in the month following the sale. The remaining 5% of sales are
never collected. Jackson's budgeted cash collections for the third calendar quarter are:
(CMA adapted)
98.
A company is preparing its cash budget for the coming month. All sales are on account.
Given the following:
Beginning
Balances
Budget
Amounts
Cash
$50,000
Accounts Receivable
180,000
Sales
$800,000
Cash disbursements
780,000
Depreciation
25,000
Ending accounts receivable
balance
210,000
What is the expected cash balance of the company at the end of the coming month? (CIA
adapted)
13-92
99.
A company is formulating its plans for the coming year, including the preparation of its
cash budget. Historically, the company's sales are 30% cash. The remaining sales are on
credit with the following collection pattern:
Collections on Account
Percentage
In the month of sale
40%
In the month following the sale
58%
Uncollectible
2%
Sales for the first 5 months of the coming year are forecast as follows:
January
$3,500,000
February
3,800,000
March
3,600,000
April
4,000,000
May
4,200,000
For the month of April, the total cash receipts from sales and collections on account
would be: (CIA adapted)
100.
Shown below is the sales forecast for Kalin Inc. for the first four months of the coming
year.
Jan
Feb
Mar
Apr
Cash sales
$15,000
$24,000
$18,000
$14,000
Credit sales
$100,000
$120,000
$90,000
$70,000
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month
following sale, and the remainder are paid two months after the month of the sale.
Assuming there are no bad debts, the expected cash inflow in March is: (CMA adapted)
13-94
101.
Budgeted sales in Washburn Company over the next four months are given below:
September
October
November
December
Budgeted
sales
$100,000
$160,000
$180,000
$120,000
102.
The following data have been taken from the budget reports of Kenyon Company, a
merchandising company.
Purchases
Sales
January
$160,000
$100,000
February
$160,000
$200,000
March
$160,000
$240,000
April
$140,000
$300,000
May
$140,000
$260,000
June
$120,000
$240,000
Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid
for in each of the next two months. Purchases for the previous November and December
were $150,000 per month. Employee wages are 10% of sales for the month in which the
sales occur. Marketing and administrative expenses are 20% of the following month's
sales. (July sales are budgeted to be $220,000.) Interest payments of $20,000 are paid
quarterly in January and April. Kenyon's cash disbursements for the month of April would
be: (CMA adapted)
103.
Budgeted Balance sheets combine all of the following except:
104.
Serene Corporation had 17,000 units of brake calipers on hand at the end of 2016. The
company's inventory policy was to maintain an ending inventory equal to 15% of the
current year's sales. During 2016, Serene sold 210,000 units of calipers. How many units
did Serene purchase in 2016?
105.
106.
Which of the following budgets is not required in a wholesale organization?
107.
Which of the following budgets is not required in a service organization?
108.
