111) Southland Company is preparing a cash budget for August. The company has $17,000 cash at the
beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash disbursements
during August. Southland Company wants to maintain a minimum cash balance of $10,000. To
maintain the minimum cash balance of $10,000, the company must borrow:
A) $27,700. B) $6,700. C) $7,000. D) $0. E) $10,000.
July
$ 90,000
August
104,000
September
120,000
112) Frankie’s Chocolate Co. reports the following information from its sales budget:
Expected Sales:
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the
month following the date of sale. The total amount of cash expected to be received from customers in
September is:
A) $130,500. B) $30,000. C) $108,000. D) $120,000. E) $78,000.
October
$ 143,000
November
151,000
December
187,000
113) Junior Snacks reports the following information from its sales budget:
Expected Sales:
All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the
month following sale. The total amount of cash expected to be received from customers in
November is:
A) $85,800. B) $236,800. C) $151,000. D) $146,200. E) $60,400.
114) A managerial accounting report that presents predicted amounts of the company’s revenues and
expenses for the budget period is called a:
A) Master plan.
B) Continuous profit statement.
C) Budgeted balance sheet.
D) Budgeted income statement.
E) Rolling income statement.
115) Justin Company’s budget includes the following credit sales for the current year: September,
$25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that
payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first
month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can
Justin Company expect to collect in November as a result of current and past credit sales?
A) $33,900. B) $19,700. C) $28,500. D) $31,100. E) $30,000.
116) Funcycle Manufacturing’s budget includes the following credit sales for the current year:
September, $145,000; October, $136,000; November, $120,000; December, $157,000. Experience
has shown that payment for the credit sales is received as follows: 15% in the month of sale, 50%
in the first month after sale, and 35% in the second month after sale. What are the cash collections
of credit sales in the month of December?
A) $83,550. B) $107,600. C) $157,000. D) $131,150. E) $23,550.
117) In preparing a budgeted balance sheet, the amount for Accounts Receivable data can be derived
from:
A) The capital expenditures budget and purchases budget.
B) The budgeted income statement and budgeted balance sheet.
C) The sales budget and the schedule of cash receipts.
D) The selling expenses budget and the schedule of cash receipts.
E) The purchases budget and schedule of cash payments.
118) Long-term liability data for the budgeted balance sheet is derived from:
A) The cash budget and capital expenditures budget.
B) The asset budget and debt budget.
C) The cash budget and budgeted income statement.
D) The cash budget and sales budget.
E) The sales budget and production budget.
119) In preparing financial budgets:
A) The budgeted income statement is usually prepared last.
B) The budgeted balance sheet is usually prepared last.
C) The budgeted income statement is usually not prepared.
D) The capital expenditures budget is usually prepared last.
E) The cash budget is usually not prepared.
120) A company’s history indicates that 20% of its sales are for cash and the rest are on credit.
Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the
following month, and 5% is uncollectible. Projected sales for December, January, and February are
$60,000, $85,000 and $95,000, respectively. The February expected cash receipts from all current
and prior credit sales is:
A) $80,750 B) $66,400 C) $61,200 D) $90,250 E) $57,000
121) A company’s history indicates that 20% of its sales are for cash and the rest are on credit.
Collections on credit sales are 30% in the month of the sale, 50% in the next month, and 15% the
following month. Projected sales for January, February, and March are $60,000, $85,000 and
$95,000, respectively. The March expected cash receipts from all current and prior credit sales is:
A) $80,750 B) $90,250 C) $57,000 D) $63,080 E) $64,000
122) Walter Enterprises expects its September sales to be 20% higher than its August sales of $150,000.
Purchases were $100,000 in August and are expected to be $120,000 in September. All sales are on
credit and are collected as follows: 30% in the month of the sale and 70% in the following month.
Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the
following month. The beginning cash balance on September 1 is $7,500. The ending cash balance
on September 30 would be:
A) $31,500. B) $136,500. C) $61,500. D) $54,000. E) $67,500.
123) The Ballentine Company expects sales for June, July, and August of $48,000, $54,000, and
$44,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit.
The company collects 50% of its credit sales in the month following sale, 45% in the second month
following sale, and 5% are not collected. What are the company’s expected cash receipts for
August from its current and past sales?
A) $66,200. B) $46,760. C) $29,160. D) $78,800. E) $61,160.
124) The Gardner Company expects sales for October of $248,000. Experience suggests that 45% of
sales are for cash and 55% are on credit. The company collects 50% of its credit sales in the month
of sale and 50% in the month following sale. Budgeted Accounts Receivable on September 30 is
$67,000. What is the amount of cash expected to be collected in October?
A) $246,800. B) $124,000. C) $179,800. D) $178,600. E) $111,600.
125) The Gardner Company expects sales for October of $248,000. Experience suggests that 45% of
sales are for cash and 55% are on credit. The company collects 50% of its credit sales in the month
of sale and 50% in the month following sale. Budgeted Accounts Receivable on September 30 is
$67,000. What is the amount of Accounted Receivables on the October 31 budgeted balance sheet?
A) $124,000. B) $67,000. C) $136,400. D) $68,200. E) $111,600.
126) Wichita Industries’ sales are 10% cash and 90% on credit. Credit sales are collected as follows:
30% in the month of sale, 50% in the next month, and 20% in the following month. On December
31, the accounts receivable balance includes $12,000 from November sales and $42,000 from
December sales. Assume that total sales for January are budgeted to be $50,000. What are the
expected cash receipts for January from the current and past sales?
A) $55,500. B) $18,500. C) $51,500. D) $51,900. E) $60,500.
127) Wichita Industries’ sales are 10% for cash and 90% on credit. Credit sales are collected as follows:
30% in the month of sale, 50% in the next month, and 20% in the following month. On December
31, the accounts receivable balance includes $12,000 from November sales and $42,000 from
December sales. Assume that total sales for January and February are budgeted to be $50,000 and
$100,000, respectively. What are the expected cash receipts for February from current and past
sales?
A) $71,500. B) $80,500. C) $59,500. D) $61,500. E) $34,500.
128) Which of the following must be prepared before the direct labor budget?
A) Merchandise purchases budget.
B) Capital expenditures budget.
C) Production budget.
D) Selling expense budget.
E) Budgeted income statement.
129) To determine the production budget for an accounting period, consideration is given to all of the
following except:
A) Budgeted beginning inventory.
B) Budgeted ending inventory.
C) Budgeted sales.
D) Ratio of inventory to future sales.
E) Budgeted overhead.