Marjorie Company has the following information: $\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\\ \text { January } & \$ 25,000 \\ \text { February } & 19,000 \\ \text { March } & 33,000 \\ \text { April } & 27,000 \\ \text { May } & 27,680 \end{array}$ Purchases are paid as follows: 75% in the month of purchase 25% one month after purchase What are the estimated cash disbursements in March?

A) $22,500 B) $24,750 C) $29,500 D) $39,000 A) $22,500 B) $24,750 C) $29,500 D) $39,000

The Pinsky Company has the following information available: $\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\\ \text { March } & \$ 150,000 \\ \text { April } & 153,000 \\ \text { May } & 151,000 \\ \text { June } & 254,500 \\ \text { July } & 252,500 \end{array}$ The gross profit rate is 40% and the desired ending inventory level is 20% of the next month's cost of sales. Required: Prepare a purchases and cost of goods sold budget for April,May and June.

The answer of The Pinsky Company has the following information...

Margaret Company has the following information: $\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\\ \text { January } & \$ 26,800 \\ \text { February } & 29,000 \\ \text { March } & 30,520 \\ \text { April } & 29,480 \\ \text { May } & 27,680 \end{array}$ Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the expected balance in Accounts Payable on May 31?

A) $2,948 B) $11,792 C) $24,912 D) $36,704 A) $2,948 B) $11,792 C) $24,912 D) $36,704

Rodney Company has the following sales budget: $\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\\ \text { September } & \$ 100,000 & \$ 250,000 \\ \text { October } & 125,000 & 180,000 \\ \text { November } & 130,000 & 210,000 \\ \text { December } & 135,000 & 190,000 \end{array}$ Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in September from September sales?

A) $100,000 B) $200,000 C) $225,000 D) $250,000 A) $100,000 B) $200,000 C) $225,000 D) $250,000

Warbel Company is preparing a cash budget for the month of June.The following information is available: $\begin{array}{ll} \text { Cash Balance, May 31, 2015 } & \$ 11,000 \\ \text { Cash collections from customers in June } & 43,000 \\ \text { Cash paid for merchandise in June } & 20,000 \\ \text { Cash paid for operating expenses in June } & 20,000 \\ \text { Paid cash dividend in June } & 5,000 \end{array}$ The minimum cash balance desired is $5,000.What is the cash balance on June 30,2015?

A) $8,000 B) $9,000 C) $10,000 D) $13,000 A) $8,000 B) $9,000 C) $10,000 D) $13,000

Exam 7: Introduction to Budgets and Preparing the Master Budget

For next year,David Company has budgeted sales of 8,000 units,target ending inventory of 1,000 units and a beginning inventory of 300 units.How many units should be purchased?

(Multiple Choice)

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Question 81

Marjorie Company has the following information: Month Budgeted Purchases January \ 25,000 February 19,000 March 33,000 April 27,000 May 27,680 Purchases are paid as follows: 75% in the month of purchase 25% one month after purchase What are the estimated cash disbursements in March?

(Multiple Choice)

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Question 82

The following rule applies when preparing the cash budget.If available cash plus net cash receipts and disbursements is negative,then borrowing is necessary.

(True/False)

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Question 83

The Pinsky Company has the following information available: Month Budgeted Purchases March \ 150,000 April 153,000 May 151,000 June 254,500 July 252,500 The gross profit rate is 40% and the desired ending inventory level is 20% of the next month's cost of sales. Required: Prepare a purchases and cost of goods sold budget for April,May and June.

(Essay)

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Question 84

The sales budget should be the responsibility of line management.

(True/False)

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Question 85

Cash collections from customers in any given month include the current month's cash sales and expected collections on credit sales.

(True/False)

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Question 86

Sales forecasts are usually prepared under the direction of the top sales executive.

(True/False)

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Question 87

A cash budget is a business plan that includes a set of schedules and financial statements.

(True/False)

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Question 88

Margaret Company has the following information: Month Budgeted Purchases January \ 26,800 February 29,000 March 30,520 April 29,480 May 27,680 Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the expected balance in Accounts Payable on May 31?

(Multiple Choice)

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Question 89

Rodney Company has the following sales budget: Month Cash Sales Credit Sales September \ 100,000 \ 250,000 October 125,000 180,000 November 130,000 210,000 December 135,000 190,000 Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in September from September sales?

(Multiple Choice)

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Question 90

How can a company avoid lying by employees when preparing a budget?

(Multiple Choice)

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Question 91

Michael Company has a sales budget for next month of $300,000.Cost of goods sold is expected to be 50% of sales.All units are paid for in the month following purchase.The beginning inventory is $10,000 and an ending inventory of $12,000 is desired.Beginning accounts payable is $76,000.The purchases for next month are ________.

(Multiple Choice)

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Question 92

An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules.

(True/False)

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Question 93

One way to reduce negative attitudes of managers toward budgets is by ________.

(Multiple Choice)

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Question 94

O'Brien Company has the following information: Cash Balance, June 30 \ 50,000 Dividends paid in July 60,000 Cash paid for operating expenses in July 185,500 Depreciation expense in July 12,000 Cash collections on sales in July 510,000 Merchandise purchases paid in July 180,000 Purchase equipment for cash in July 94,500 O'Brien Company wants to maintain a minimum cash balance of $50,000.Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month.Interest of 1% per month is paid in cash at the end of each month debt is outstanding.Borrowing and repayment is carried out in multiples of $1,000. Required: Prepare a cash budget for July.

(Essay)

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Question 95

Warbel Company is preparing a cash budget for the month of June.The following information is available: Cash Balance, May 31, 2015 \ 11,000 Cash collections from customers in June 43,000 Cash paid for merchandise in June 20,000 Cash paid for operating expenses in June 20,000 Paid cash dividend in June 5,000 The minimum cash balance desired is $5,000.What is the cash balance on June 30,2015?

(Multiple Choice)

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Question 96

A(n)________ starts with the assumption that current activities in a company will not automatically continue in the next period.

(Multiple Choice)

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Question 97

Managers may lie to increase the resources allocated to their departments.

(True/False)

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Question 98

Which of the following is NOT a component of the operating budget?

(Multiple Choice)

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Question 99

The schedule of cash collections from customers has ________.

(Multiple Choice)

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Question 100

For next year,David Company has budgeted sales of 8,000 units,target ending inventory of 1,000 units and a beginning inventory of 300 units.How many units should be purchased?

Marjorie Company has the following information: Month Budgeted Purchases January \ 25,000 February 19,000 March 33,000 April 27,000 May 27,680 Purchases are paid as follows: 75% in the month of purchase 25% one month after purchase What are the estimated cash disbursements in March?

The following rule applies when preparing the cash budget.If available cash plus net cash receipts and disbursements is negative,then borrowing is necessary.

The sales budget should be the responsibility of line management.

Cash collections from customers in any given month include the current month's cash sales and expected collections on credit sales.

Sales forecasts are usually prepared under the direction of the top sales executive.

A cash budget is a business plan that includes a set of schedules and financial statements.

How can a company avoid lying by employees when preparing a budget?

An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules.

One way to reduce negative attitudes of managers toward budgets is by ________.

A(n)________ starts with the assumption that current activities in a company will not automatically continue in the next period.

Managers may lie to increase the resources allocated to their departments.

Which of the following is NOT a component of the operating budget?

The schedule of cash collections from customers has ________.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

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