35) Caribbean Tool and Die Company’s forecasted sales for April, May, June and July are $150,000, $225,000,
$180,000, and $210,000, respectively. Sales are 50% cash and 50% credit with all accounts receivables collected in
the month following the sale.
What are the cash collections budgeted for June?
A) $112,500
B) $180,000
C) $202,500
D) $220,000
36) A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance
sheet. To provide the balance for the Cash account, which document should be used?
A) Inventory, purchases and cost of goods sold budget
B) Budgeted income statement
C) Cash budget
D) Sales budget
37) A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance
sheet. To provide the balance for Accounts receivable, which document should be used?
A) Inventory, purchases and cost of goods sold budget
B) Sales budget plus budgeted cash collections
C) Cash budget
D) Operating expenses budget
38) A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance
sheet. To provide the balance for Inventory, which document should be used?
A) Inventory, purchases and cost of goods sold budget
B) Budgeted cash collections
C) Cash budget
D) Operating expenses budget
39) A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance
sheet. To provide the balance for Accounts payable, which document should be used?
A) Inventory, purchases and cost of goods sold budget
B) Budgeted cash payments for purchases
C) Cash budget
D) Operating expenses budget
40) A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance
sheet. To provide the balance for Retained earnings, which document should be used?
A) Inventory, purchases and cost of goods sold budget
B) Budgeted cash payments for purchases
C) Cash budget
D) Budgeted income statement
41) At June 30, 2012, Alpha Company’s cash balance is $4,000. Alpha is now preparing their cash budget for the
third quarter of 2012. The following data is provided:
Cash budget Jul Aug Sep
Beginning cash balance $4,000 $8,000 $6,958
Cash collections 50,000 40,000 48,000
Cash available 54,000 48,000 54,958
Cash payments:
Purchases of inventory 31,000 22,000 18,000
Operating expenses 12,000 9,000 11,600
Capital expenditures 13,000 25,000 0
Total cash payments $56,000 $56,000 $29,600
Ending cash balance before financing $(2,000) $(8,000) $25,358
Minimum cash balance desired (5,000) (5,000) (5,000)
Cash excess/(deficiency) (7,000) (13,000) 20,358
Financing
Borrowing at end of month 10,000 15,000
Principal payments at end of month (20,000)
Interest expense at 5% (42) (104)
Total effects of financing 10,000 14,958 (20,104)
Ending cash balance $8,000 $6,958 $5,254
For the budgeted balance sheet at September 30, 2012, what amount of Cash should be shown?
A) $6,958
B) $8,000
C) $5,254
D) $4,297
42) Beta Company is now preparing their budget for the 2nd quarter. The following data is provided:
Sales Budget Apr May Jun
Cash sales $32,000 $36,000 $42,000
Credit sales 40,000 50,000 54,000
Total sales $72,000 $86,000 $96,000
Budgeted Cash Collections Apr May Jun
Cash sales collected in month of sale $32,000 $36,000 $42,000
Credit sales -20% collected in current month 8,000 10,000 10,800
Credit sales – 80% collected from previous month 29,000 32,000 40,000
Total collections $69,000 $78,000 $92,800
For the budgeted balance sheet at June 30, what amount should be shown for Accounts receivable?
A) $43,200
B) $54,000
C) $96,000
D) $40,000
43) Charter Company is preparing their budget for the 1st quarter of 2012. The following data is provided:
Inventory, Purchases and COGS Budget Jan Feb Mar
Cost of goods sold (a) $30,000 $28,500 $22,500
Desired ending inventory(b) 10,700 9,500 9,800
Total inventory required 40,700 38,000 32,300
less Beginning inventory (11,000) (10,700) (9,500)
Purchases 29,700 27,300 22,800
(a) COGS = 75% of sales
(b) $5,000 + 20% of COGS for next month
For the budgeted balance sheet at March 31, what amount should be shown for Inventory?
A) $9,500
B) $10,700
C) $8,750
D) $9,800
44) Deerborne Company is preparing their budget for the 2nd quarter and provides the following data:
Apr May Jun
Budgeted purchases $10,000 $12,000 $9,000
Budgeted Cash Payments for Inventory Purchases Apr May Jun
60% of previous month purchases 5,000 6,000 7,200
40% of current month purchases 4,000 4,800 3,600
Total cash payments $9,000 $10,800 $10,800
Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, what should the
budgeted balance sheet show as the balance of Accounts payable at June 30?
A) $12,000
B) $3,600
C) $7,200
D) $5,400
45) When a company is preparing a budgeted statement of cash flows and they wish to calculate the collections from
customers, they should refer to which of the following?
A) Budgeted cash payments for purchases
B) Sales budget
C) Budgeted cash collections
D) Budgeted balance sheet
46) When a company is preparing a budgeted statement of cash flows and they wish to calculate the payments to
suppliers for purchases of inventory, they should refer to which of the following?
A) Budgeted cash payments for purchases
B) Sales budget
C) Budgeted cash collections
D) Budgeted balance sheet
47) When a company is preparing a budgeted statement of cash flows and they wish to calculate the payments for
operating expenses, they should refer to which of the following?
A) Budgeted cash payments for purchases
B) Sales budget
C) Budgeted cash payments for operating expenses
D) Budgeted balance sheet
48) Chaterlain Company is preparing its budget for the 3rd quarter. Cash balance at June 30 was $11,000.
Additional budgeted data is provided here:
Jul Aug Sep
Cash collections $42,000 $51,000 $39,000
Cash payments:
Purchases of inventory 14,000 9,000 11,000
Operating expenses 25,000 22,700 30,900
Capital expenditures 5,200 9,000 14,000
What amount should be shown in the cash budget for the cash balance at the end of July?
A) $19,100
B) $8,800
C) $9,050
D) $2,200
49) Chaterlain Company is preparing its budget for the 3rd quarter. Cash balance at June 30 was $11,000.
Additional budgeted data is provided here:
Jul Aug Sep
Cash collections $42,000 $51,000 $39,000
Cash payments:
Purchases of inventory 14,000 9,000 11,000
Operating expenses 25,000 22,700 30,900
Capital expenditures 5,200 9,000 14,000
What amount should be shown in the cash budget for the cash balance at the end of August?
A) $19,100
B) $8,800
C) $9,050
D) $2,200
50) Chaterlain Company is preparing its budget for the 3rd quarter. Cash balance at June 30 was $11,000.
Additional budgeted data is provided here:
Jul Aug Sep
Cash collections $42,000 $51,000 $39,000
Cash payments:
Purchases of inventory 14,000 9,000 11,000
Operating expenses 25,000 22,700 30,900
Capital expenditures 5,200 9,000 14,000
What amount should be shown in the cash budget for the cash balance at the end of September?
A) $19,100
B) $8,800
C) $9,050
D) $2,200
51) Pentangle Company has prepared a preliminary cash budget for the 3rd quarter as shown below:
Cash Budget Jul Aug Sep
Beginning cash balance $32,000 $4,400 $6,900
Cash collections 49,400 51,000 44,600
Cash available 81,400 55,400 51,500
Cash payments:
Purchases of inventory 36,000 9,000 11,000
Operating expenses 41,000 30,500 30,900
Capital expenditures 0 9,000 7,700
Total cash payments $77,000 $48,500 $49,600
Ending cash balance $4,400 $6,900 $1,900
Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000
in July, $50,000 in August, and $42,000 in September. Based on the new data, what is the new projected cash
balance at the end of July?
A) $8,500
B) $2,400
C) $7,000
D) $900
52) Pentangle Company has prepared a preliminary cash budget for the 3rd quarter as shown below:
Cash Budget Jul Aug Sep
Beginning cash balance $32,000 $4,400 $6,900
Cash collections 49,400 51,000 44,600
Cash available 81,400 55,400 51,500
Cash payments:
Purchases of inventory 36,000 9,000 11,000
Operating expenses 41,000 30,500 30,900
Capital expenditures 0 9,000 7,700
Total cash payments $77,000 $48,500 $49,600
Ending cash balance $4,400 $6,900 $1,900
Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000
in July, $50,000 in August, and $42,000 in September. Based on the new data, what is the new projected cash
balance at the end of August?
A) $8,500
B) $2,400
C) $7,000
D) $900
53) Pentangle Company has prepared a preliminary cash budget for the 3rd quarter as shown below:
Cash Budget Jul Aug Sep
Beginning cash balance $32,000 $4,400 $6,900
Cash collections 49,400 51,000 44,600
Cash available 81,400 55,400 51,500
Cash payments:
Purchases of inventory 36,000 9,000 11,000
Operating expenses 41,000 30,500 30,900
Capital expenditures 0 9,000 7,700
Total cash payments $77,000 $48,500 $49,600
Ending cash balance $4,400 $6,900 $1,900
Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000
in July, $50,000 in August, and $42,000 in September. Based on the new data, what is the new projected cash
balance at the end of September?
A) $8,500
B) $2,400
C) $7,000
D) $900
54) Southshore Company is preparing its financial budget for the first quarter, and is focusing on budgeted cash
collections. Accounts receivable at the end of the previous year were $30,000. Sales in the first quarter are
forecasted as follows:
Budgeted Sales Jan Feb Mar
Cash sales $40,000 $50,000 $48,000
Credit sales 33,000 38,000 35,000
Total sales $73,000 $88,000 $83,000
The budget assumes that cash from the credit sales is collected the month after the credit sales take place.
Using the following format, please prepare the budgeted cash collections.
Budgeted Cash Collections Jan Feb Mar
Cash sales collected in month of sale
Credit sales – collected from previous month’s sales
Total collections
55) Circle A Company is preparing its cash collections budget for the 2nd quarter of 2012. Budgeted sales are as
follows:
Budgeted sales Apr May Jun
Cash sales $10,000 $9,000 $7,500
Credit sales 24,000 20,000 16,500
Total sales $34,000 $29,000 $24,000
Accounts receivable at March 31 were $14,000. The budget assumes that 20% of credit sales are collected in the
month of sale, and the remaining 80% are collected one month later. Using the format below, please prepare the
cash collections budget.
Budgeted cash collections Apr May Jun
Cash sales collected in month of sale
Credit sales -20% collected in current month
Credit sales – 80% collected from previous month
Total collections
56) Mudbug International has budgeted inventory purchases as follows:
Apr May Jun
Budgeted purchases $80,000 $75,000 $70,000
The budget assumes that 50% of a given month’s purchases are paid in the month of purchase, and the remaining
50% is paid out one month later. Accounts payable to inventory suppliers at March 31 was $38,000. Please use
the format below and prepare the budgeted cash payments for inventory purchases.
Budgeted Cash Payments for Inventory Purchases Apr May Jun
50% of previous month purchases
50% of current month purchases
Total cash payments
57) Pequod Company has budgeted inventory purchases as follows:
Apr May Jun
Budgeted purchases $10,000 $12,000 $9,000
The budget assumes that 40% of a given month’s purchases are paid in the month of purchase, and the remaining
60% is paid out one month later. Accounts payable to inventory suppliers at March 31 was $5,000. Please use the
format below and prepare the budgeted cash payments for inventory purchases.
Budgeted Cash Payments for Inventory Purchases Apr May Jun
60% of previous month purchases
40% of current month purchases
Total cash payments
76
58) Craig Manufacturing Company’s budgeted income statement includes the following data:
Data extracted from budgeted income statement Mar Apr May Jun
Sales $120,000 $90,000 $95,000 $100,000
Commission expense – 15% of sales 18,000 13,500 14,250 15,000
Salary exp 30,000 30,000 30,000 30,000
Miscellaneous expense — 4% of sales 4,800 3,600 3,800 4,000
Rent expense 3,600 3,600 3,600 3,600
Utility expense 1,900 1,900 1,900 1,900
Insurance expense 2,100 2,100 2,100 2,100
Depreciation expense 4,400 4,400 4,400 4,400
The budget assumes that 60% of commission expenses are paid in the month they were incurred and the remaining
40% are paid one month later. In addition, 50% of salary expenses are paid in the month incurred and the remaining
50% are paid one month later. Miscellaneous expenses, rent expense and utility expenses are assumed to be paid in
the same month in which they are incurred. Insurance was prepaid for the year on January 1.
Please provide a budget of cash payments for operating expenses using the following format:
Budget of Cash Payments for Operating Expenses Apr May Jun
Variable expenses
40% of last month’s commission expense
60% of this month’s commission expense
Misc. expenses – 4% of sales
Total variable operating expenses
Fixed expenses
50% of last month‘s salary expense
50% of this month’s salary expense
Rent exp.
Utility exp.
Total payments for fixed operating expense
Total payments for operating expenses
59) California Products Company has the following data as part of its budget for the 2nd quarter:
Apr May Jun
Cash collections $30,000 $32,000 $36,000
Cash payments:
Purchases of inventory 4,500 4,600 3,800
Operating expenses 7,200 7,600 8,000
Capital expenditures 0 24,500 5,200
The cash balance at April 1 is forecast to be $8,200. Please prepare a cash budget using the following format:
Cash Budget Apr May Jun
Beginning cash balance
Cash collections
Cash available
Cash payments:
Purchases of inventory
Operating expenses
Capital expenditures
Total cash payments
Ending cash balance
60) Zygot Biotech Company is budgeting for the 3rd quarter, and provide the following data:
Jul Aug Sep
Cash collections $50,000 $40,000 $48,000
Cash payments:
Purchases of inventory 31,000 22,000 18,000
Operating expenses 12,000 9,000 11,600
Capital expenditures 0 19,000 0
The cash balance at June 30 is projected to be $5,600. There are no financing transactions planned in the 3rd
quarter. Please use the format below and prepare the cash budget:
Cash Budget Jul Aug Sep
Beginning cash balance
Cash collections
Cash available
Cash payments:
Purchases of inventory
Operating expenses
Capital expenditures
Total cash payments
Ending cash balance
61) AAA Company is preparing its 3rd quarter budget and provides the following data:
Jul Aug Sep
Cash collections $50,000 $40,000 $48,000
Cash payments:
Purchases of inventory 31,000 22,000 18,000
Operating expenses 12,000 9,000 11,600
Capital expenditures 0 19,000 0