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68.
Vandel Inc. bases its selling and administrative expense budget on budgeted unit sales. The
sales budget shows 6,600 units are planned to be sold in April. The variable selling and
administrative expense is $9.70 per unit. The budgeted fixed selling and administrative
expense is $127,380 per month, which includes depreciation of $8,580 per month. The
remainder of the fixed selling and administrative expense represents current cash flows. The
cash disbursements for selling and administrative expenses on the April selling and
administrative expense budget should be:
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69.
Laurey Inc. is working on its cash budget for May. The budgeted beginning cash balance is
$45,000. Budgeted cash receipts total $129,000 and budgeted cash disbursements total
$124,000. The desired ending cash balance is $60,000. To attain its desired ending cash
balance for May, the company needs to borrow:
70.
Arakaki Inc. is working on its cash budget for January. The budgeted beginning cash balance
is $41,000. Budgeted cash receipts total $114,000 and budgeted cash disbursements total
$113,000. The desired ending cash balance is $60,000. The excess (deficiency) of cash
available over disbursements for January will be:
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71.
Sparks Corporation has a cash balance of $7,500 on April 1. The company must maintain a
minimum cash balance of $6,000. During April, expected cash receipts are $48,000. Cash
disbursements during the month are expected to total $52,000. Ignoring interest payments,
during April the company will need to borrow:
72.
For May, Young Corporation has budgeted its cash receipts at $125,000 and its cash
disbursements at $138,000. The company’s cash balance on May 1 is $17,000. If the desired
May 31 cash balance is $20,000, then how much cash must the company borrow during the
month (before considering any interest payments)?
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73.
Harrti Corporation has budgeted for the following sales:
July
$425,000
August
$510,000
September
$605,000
October
$830,000
November
$715,000
December
$680,000
Sales are collected as follows: 10% in the month of sale; 60% in the month following the sale;
and the remaining 30% in the second month following the sale. In Razz’s budgeted balance
sheet at December 31, at what amount will accounts receivable be shown?
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74.
The Khaki Corporation has the following budgeted sales data:
January
February
March
April
Cash
Sales
$70,000
$90,000
$80,000
$70,000
Credit
Sales
$400,000
$350,000
$300,000
$320,000
The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the month
following sale, and the remainder in the second month following the month of sale. There are
no bad debts.
The budgeted accounts receivable balance on February 28 would be:
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75.
The Khaki Corporation has the following budgeted sales data:
January
February
March
April
Cash
Sales
$70,000
$90,000
$80,000
$70,000
Credit
Sales
$400,000
$350,000
$300,000
$320,000
February credit sales collected in April
March credit sales collected in April
April credit sales collected in April (40%
The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the month
following sale, and the remainder in the second month following the month of sale. There are
no bad debts.
The budgeted cash receipts for April would be:
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76.
Home Corporation will open a new store on January 1. Based on experience from its other
retail outlets, Home Corporation is making the following sales projections:
Cash Sales
Credit Sales
January
$60,000
$40,000
February
$30,000
$50,000
March
$40,000
$60,000
April
$40,000
$80,000
Home Corporation estimates that 70% of the credit sales will be collected in the month
following the month of sale, with the balance collected in the second month following the
month of sale.
Based on these data, the balance in accounts receivable on January 31 will be:
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77.
Home Corporation will open a new store on January 1. Based on experience from its other
retail outlets, Home Corporation is making the following sales projections:
Cash Sales
Credit Sales
January
$60,000
$40,000
February
$30,000
$50,000
March
$40,000
$60,000
April
$40,000
$80,000
Home Corporation estimates that 70% of the credit sales will be collected in the month
following the month of sale, with the balance collected in the second month following the
month of sale.
The March 31 balance in accounts receivable will be:
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78.
Home Corporation will open a new store on January 1. Based on experience from its other
retail outlets, Home Corporation is making the following sales projections:
Cash Sales
Credit Sales
January
$60,000
$40,000
February
$30,000
$50,000
March
$40,000
$60,000
April
$40,000
$80,000
Home Corporation estimates that 70% of the credit sales will be collected in the month
following the month of sale, with the balance collected in the second month following the
month of sale.
In a cash budget for April, the total cash receipts will be:
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79.
Richards Corporation has the following budgeted sales for the first half of next year:
Cash Sales
Credit Sales
January
$80,000
$350,000
February
$60,000
$200,000
March
$50,000
$145,000
April
$45,000
$130,000
May
$55,000
$170,000
June
$50,000
$150,000
The company is in the process of preparing a cash budget and must determine the expected
cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
30% in month following sale
10% in second month following sale
November credit sales collected in January
December credit sales collected in January ($150,000 × 30%)
January credit sales collected in January ($350,000 × 60%)
January cash sales
Total cash collections in January
$345,000
The accounts receivable balance on January 1 is $70,000. Of this amount, $60,000
represents uncollected December sales and $10,000 represents uncollected November sales.
The total cash collected during January would be:
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80.
Richards Corporation has the following budgeted sales for the first half of next year:
Cash Sales
Credit Sales
January
$80,000
$350,000
February
$60,000
$200,000
March
$50,000
$145,000
April
$45,000
$130,000
May
$55,000
$170,000
June
$50,000
$150,000
The company is in the process of preparing a cash budget and must determine the expected
cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
30% in month following sale
10% in second month following sale
May 30 accounts receivable
The accounts receivable balance on January 1 is $70,000. Of this amount, $60,000
represents uncollected December sales and $10,000 represents uncollected November sales.
What is the budgeted accounts receivable balance on May 30?
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81.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the
store’s operations follow:
o Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for
January.
o Collections are expected to be 80% in the month of sale, 17% in the month following the
sale, and 3% uncollectible.
o The cost of goods sold is 75% of sales.
o The company would like to maintain ending merchandise inventories equal to 70% of the
next month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
o Other monthly expenses to be paid in cash are $21,800.
o Monthly depreciation is $19,000.
o Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$28,000
Accounts receivable, net of allowance for uncollectible accounts
76,000
Merchandise inventory
173,250
Property, plant and equipment, net of $604,000 accumulated depreciation
1,170,000
Total assets
$1,447,250
Liabilities and Stockholders’ Equity
Accounts payable
$255,000
Common stock
840,000
Retained earnings
352,250
Total liabilities and stockholders’ equity
$1,447,250
December credit sales collected in December ($340,000 × 80%)
November credit sales collected in December ($330,000 × 17%)
56,100
Total cash collections in December
$328,100
Expected cash collections in December are:
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82.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the
store’s operations follow:
o Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for
January.
o Collections are expected to be 80% in the month of sale, 17% in the month following the
sale, and 3% uncollectible.
o The cost of goods sold is 75% of sales.
o The company would like to maintain ending merchandise inventories equal to 70% of the
next month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
o Other monthly expenses to be paid in cash are $21,800.
o Monthly depreciation is $19,000.
o Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$28,000
Accounts receivable, net of allowance for uncollectible accounts
76,000
Merchandise inventory
173,250
Property, plant and equipment, net of $604,000 accumulated depreciation
1,170,000
Total assets
$1,447,250
Liabilities and Stockholders’ Equity
Accounts payable
$255,000
Common stock
840,000
Retained earnings
352,250
Total liabilities and stockholders’ equity
$1,447,250
Cost of goods sold (75% of sales)
The cost of December merchandise purchases would be:
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83.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the
store’s operations follow:
o Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for
January.
o Collections are expected to be 80% in the month of sale, 17% in the month following the
sale, and 3% uncollectible.
o The cost of goods sold is 75% of sales.
o The company would like to maintain ending merchandise inventories equal to 70% of the
next month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
o Other monthly expenses to be paid in cash are $21,800.
o Monthly depreciation is $19,000.
o Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$28,000
Accounts receivable, net of allowance for uncollectible accounts
76,000
Merchandise inventory
173,250
Property, plant and equipment, net of $604,000 accumulated depreciation
1,170,000
Total assets
$1,447,250
Liabilities and Stockholders’ Equity
Accounts payable
$255,000
Common stock
840,000
Retained earnings
352,250
Total liabilities and stockholders’ equity
$1,447,250
Sales
Cost of goods sold (75% of sales)
$247,500
December cash disbursements for merchandise purchases would be:
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84.
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the
store’s operations follow:
o Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for
January.
o Collections are expected to be 80% in the month of sale, 17% in the month following the
sale, and 3% uncollectible.
o The cost of goods sold is 75% of sales.
o The company would like to maintain ending merchandise inventories equal to 70% of the
next month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
o Other monthly expenses to be paid in cash are $21,800.
o Monthly depreciation is $19,000.
o Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$28,000
Accounts receivable, net of allowance for uncollectible accounts
76,000
Merchandise inventory
173,250
Property, plant and equipment, net of $604,000 accumulated depreciation
1,170,000
Total assets
$1,447,250
Liabilities and Stockholders’ Equity
Accounts payable
$255,000
Common stock
840,000
Retained earnings
352,250
Total liabilities and stockholders’ equity
$1,447,250
December credit sales collected in December ($340,000 × 80%)
November credit sales collected in December ($330,000 × 17%)
The difference between cash receipts and cash disbursements for December would be:
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85.
Dilbert Farm Supply is located in a small town in the rural west. Data regarding the store’s
operations follow:
o Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for
January.
o Collections are expected to be 80% in the month of sale, 19% in the month following the
sale, and 1% uncollectible.
o The cost of goods sold is 65% of sales.
o The company desires to have an ending merchandise inventory at the end of each month
equal to 60% of the next month’s cost of goods sold. Payment for merchandise is made in the
month following the purchase.
o Other monthly expenses to be paid in cash are $20,300.
o Monthly depreciation is $20,000.
o Ignore taxes.
Balance Sheet
October 31
Assets
Cash
$27,000
Accounts receivable, net of allowance for uncollectible accounts
79,000
Merchandise inventory
101,400
Property, plant and equipment, net of $574,000 accumulated depreciation
1,082,000
Total assets
$1,289,400
Liabilities and Stockholders’ Equity
Accounts payable
$169,000
Common stock
740,000
Retained earnings
380,400
Total liabilities and stockholders’ equity
$1,289,400
November credit sales collected in December ($260,000 × 19%)
Expected cash collections in December are:
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