Exam 22: Master Budgets

A manufacturer has provided the following details for goods purchased on account in different months. The terms of payment offered by the suppliers are to pay 70% in the month of purchase and 30% in the following month. Calculate the payments on account made during the first six months.

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Accounts Payable can be taken from:

The output of a cash budget is input for an operating budget.

Which of the following statements is true of the capital expenditures budget?

The capital expenditures budget is prepared before the preparation of the cash budget.

Caplico Company has prepared the following sales budget: Cost of goods sold is budgeted at 60% of sales and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

Freightcan Holders has provided the following extracts from their budget for the first quarter of the forthcoming year: The vendors allowed terms of payment as follows: Calculate the total payment on account for the month of March.

A3+ has prepared its 3rd quarter budget and provided the following data: The cash balance on June 30 is projected to be $4,000. The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 5%. All financing transactions are assumed to take place at the end of the month. The loan balance should be repaid in increments of $5,000 whenever there is surplus cash. How much will the company have to borrow at the end of July?

Freighters Inc. has the following budgeted figures: Calculate the budgeted purchases for the month of January.

The final step in the process of creating the master budget is the preparation of:

Fly GenX Inc. has the following budgeted sales for the next quarter. Inventory of finished goods on hand at the beginning of the quarter is 4,000 units. The company desires to maintain ending inventory equal to beginning inventory plus 1,000 units every month. Calculate the quantity to be produced during the quarter.

Junk Fries has budgeted sales for June and July at $680,000 and $720,000, respectively. Sales are 80% credit, of which 70% is collected in the month of sale and 30% is collected in the following month. What is the accounts receivable balance on July 31?

Budgeting requires managers to decide upon the course of action and then to plan for the same.

The production budget determines the number of units to be produced during the period.

The amount of accumulated depreciation for the budgeted balance sheet can be obtained from:

Diemans Corp. has provided a part of its budget for the 2^nd quarter: The cash balance on April 1 is $12,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of April.

While calculating the cash payments for budgeted selling and administrative expenses, non-cash expenses like depreciation are also considered.

Which of the following statements is true of the operating budget?

Diemans Corp. has provided a part of its budget for the 2^nd quarter: The cash balance on April 1 is $12,000. Assume that there will be no financing transactions or costs during the quarter. Calculate the cash balance at the end of May.