Flamingo,Inc.has the following budgeted figures: $\begin{array}{|l|l|l|l|l} \hline & \text {Jan } & \text { Feb } & \text { Mar } & \text { April } \\ \hline \text { Sales } & \$ 57,500 & \$ 60,000 & \$ 85,000 & \$ 90,000 \\ \hline \text { Cost of goods sold } & 50 \% \text { of sales } & & & \\ \hline & \$ 20,000+25 \% & & & \\ & \begin{array}{l} \text { of next month's } \\ \text { sales } \end{array} & & & \\ \text { Required ending inventory } & & & & \\ \hline \text { Inventory on hand on Jan 1 } & \$ 27,500 & & \\ \hline \end{array}$ Calculate cost of goods sold for the month of February.

A) $15,000 B) $34,500 C) $42,000 D) $36,000 A) $15,000 B) $34,500 C) $42,000 D) $36,000

Monument Corp.is preparing its budget for the first quarter of 2018.The following data is provided: \[\begin{array} { | l | r | r | r | } \hline \text { Inventory, Purchases, and COGS Budget } & \text { Jan } & \text { Feb } & \text { March } \\ \hline \text { Cost of goods sold (a) } & \$ 33,000 & \$ 27,000 & \$ 22,500 \\ \hline \text { Desired ending inventory (b) } & 10,400 & 9,500 & ? \\ \hline \text { Total inventory required } & 43,400 & 36,500 & \\ \hline \text { Less: Beginning inventory } & ( 15,000) & \underline { ( 10,400 )} & \\ \hline \text { Purchases } & 28,400 & 26,100 & \\ \hline \text { (a) COGS } = 75 \% \text { of sales } & & & \\ \hline \text { (b) } \$ 5,000 + 20 \% \text { of COGS for next month } & & & \\ \hline \end{array}\] April's cost of goods sold is 28,000.The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be ________.

A) $9,500 B) $10,400 C) $33,000 D) $10,600 A) $9,500 B) $10,400 C) $33,000 D) $10,600

Caplico Company has prepared the following sales budget: \[\begin{array} { | l | r | } \hline \text { Month } & \text { Budgeted Sales } \\ \hline \text { March } & \$ 400,000 \\ \hline \text { April } & 182,000 \\ \hline \text { May } & 220,000 \\ \hline \text { June } & 232,000 \\ \hline \end{array}\] Cost of goods sold is budgeted at 60% of sales,and the inventory at the end of February was $35,000.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?

A) $46,400 B) $26,400 C) $130,200 D) $27,840 A) $46,400 B) $26,400 C) $130,200 D) $27,840

Tokyo Corp.has prepared a preliminary cash budget for the third quarter as shown below: \[\begin{array} { | l | r | r | r | } \hline \text { Cash Budget } &{ \text { Jul } } &{ \text { Aug } } &{ \text { Sep } } \\ \hline \text { Beginning cash balance } & \$ 36,000 & \$ 11,000 & \$ 17,000 \\ \hline \text { Plus: Cash collections } & \$ 51,000 & \$ 52,000 & \underline { 47,400 } \\ \hline \text { Cash available } & 87,000 & \$ 63,000 & \$ 64,400 \\ \hline \text { Less: Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 34,000 & 8,000 & 10,000 \\ \hline \text { Operating expenses } & 41,000 & 30,000 & 30,800 \\ \hline \text { Capital expenditures } & \underline { 1,000 } & \underline { 8,000 } & \underline { 7,700 } \\ \hline \text { Ending cash balance } & \$ 11,000 & \$ 17,000 & \$ 15,900 \\ \hline \end{array}\] Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $52,000 in July,$56,000 in August,and $46,000 in September.Based on the new data,calculate the new projected cash balance at the end of August.

A) $22,000 B) $17,000 C) $12,000 D) $19,500 A) $22,000 B) $17,000 C) $12,000 D) $19,500

Gamma Corp.has prepared a preliminary cash budget for the third quarter as shown below: \[\begin{array} { | l | r | r | r | } \hline \text { Cash Budget } & { \text { Jul } } & { \text { Aug } } & { \text { Sep } } \\ \hline \text { Beginning cash balance } & \$ 32,000 & \$ 10,000 & \$ 14,500 \\ \hline \text { Plus: Cash collections } & \$ 54,000 & \$ 52,000 & \underline { 47,200 } \\ \hline \text { Cash available } & 86,000 & \$ 62,000 & \$ 61,700 \\ \hline \text { Less: Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 35,000 & 8,000 & 11,000 \\ \hline \text { Operating expenses } & 40,000 & 30,500 & 30,800 \\ \hline \text { Capital expenditures } & \underline { 1,000 } & \underline { 9,000 } & \underline { 7,700 } \\ \hline \text { Ending cash balance } & \$ 10,000 & \$ 14,500 & \$ 12,200 \\ \hline \end{array}\] 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,calculate the new projected cash balance at the end of July.

A) $10,500 B) $10,000 C) $8,000 D) $3,000 A) $10,500 B) $10,000 C) $8,000 D) $3,000

Exam 22: Master Budgets

Flamingo,Inc.has the following budgeted figures: Jan Feb Mar April Sales \ 57,500 \ 60,000 \ 85,000 \ 90,000 Cost of goods sold 50\% of sales \ 20,000+25\% of next month's sales Required ending inventory Inventory on hand on Jan 1 \ 27,500 Calculate cost of goods sold for the month of February.

(Multiple Choice)

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Question 101

Developing a budget reduces coordination and communication at different levels in an organization.

(True/False)

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Question 102

Monument Corp.is preparing its budget for the first quarter of 2018.The following data is provided: Inventory, Purchases, and COGS Budget Jan Feb March Cost of goods sold (a) \ 33,000 \ 27,000 \ 22,500 Desired ending inventory (b) 10,400 9,500 ? Total inventory required 43,400 36,500 Less: Beginning inventory (15,000) Purchases 28,400 26,100 (a) COGS =75\% of sales (b) \ 5,000+20\% of COGS for next month April's cost of goods sold is 28,000.The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be ________.

(Multiple Choice)

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Question 103

McLeod Fries,Inc.has budgeted sales for June and July at $670,000 and $770,000,respectively.Sales are 85% credit,of which 60% is collected in the month of sale and 40% is collected in the following month.What is the budgeted Accounts Receivable balance on July 31?

(Multiple Choice)

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Question 104

Caplico Company has prepared the following sales budget: Month Budgeted Sales March \ 400,000 April 182,000 May 220,000 June 232,000 Cost of goods sold is budgeted at 60% of sales,and the inventory at the end of February was $35,000.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?

(Multiple Choice)

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Question 105

Tokyo Corp.has prepared a preliminary cash budget for the third quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance \ 36,000 \ 11,000 \ 17,000 Plus: Cash collections \ 51,000 \ 52,000 Cash available 87,000 \ 63,000 \ 64,400 Less: Cash payments: Purchases of direct materials 34,000 8,000 10,000 Operating expenses 41,000 30,000 30,800 Capital expenditures Ending cash balance \ 11,000 \ 17,000 \ 15,900 Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $52,000 in July,$56,000 in August,and $46,000 in September.Based on the new data,calculate the new projected cash balance at the end of August.

(Multiple Choice)

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Question 106

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

(True/False)

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Question 107

On June 30,Alpha Company's cash balance is $4,000.Alpha is now preparing their cash budget for the third quarter of the year.The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as of September 30 would be ________.

(Multiple Choice)

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Question 108

A static budget is a financial plan for only one level of sales volume.

(True/False)

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Question 109

Which of the following statements regarding capital expenditures is incorrect?

(Multiple Choice)

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Question 110

List the four budgeting objectives.Why is this process a loop?

(Essay)

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Question 111

For manufacturing companies,the primary source of cash is from its customers.

(True/False)

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Question 112

Gamma Corp.has prepared a preliminary cash budget for the third quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance \ 32,000 \ 10,000 \ 14,500 Plus: Cash collections \ 54,000 \ 52,000 Cash available 86,000 \ 62,000 \ 61,700 Less: Cash payments: Purchases of direct materials 35,000 8,000 11,000 Operating expenses 40,000 30,500 30,800 Capital expenditures Ending cash balance \ 10,000 \ 14,500 \ 12,200 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,calculate the new projected cash balance at the end of July.

(Multiple Choice)

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Question 113

The budget process is a loop that consists of ________.

(Multiple Choice)

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Question 114

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

(True/False)

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Question 115

List the budgets that are affected by the budgeted number of units to be produced.

(Essay)

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Question 116

The last step in the preparation of the master budget is the budgeted income statement.

(True/False)

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Question 117

A flexible budget is prepared to represent various levels of sales volume.

(True/False)

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Question 118

The most important part of a budgeting system is getting managers and employees to accept the budget.

(True/False)

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Question 119

The forecast of sales revenue is the cornerstone of the master budget.

(True/False)

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Question 120

Flamingo,Inc.has the following budgeted figures: Jan Feb Mar April Sales \ 57,500 \ 60,000 \ 85,000 \ 90,000 Cost of goods sold 50\% of sales \ 20,000+25\% of next month's sales Required ending inventory Inventory on hand on Jan 1 \ 27,500 Calculate cost of goods sold for the month of February.

Developing a budget reduces coordination and communication at different levels in an organization.

McLeod Fries,Inc.has budgeted sales for June and July at $670,000 and $770,000,respectively.Sales are 85% credit,of which 60% is collected in the month of sale and 40% is collected in the following month.What is the budgeted Accounts Receivable balance on July 31?

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

On June 30,Alpha Company's cash balance is $4,000.Alpha is now preparing their cash budget for the third quarter of the year.The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as of September 30 would be ________.

A static budget is a financial plan for only one level of sales volume.

Which of the following statements regarding capital expenditures is incorrect?

List the four budgeting objectives.Why is this process a loop?

For manufacturing companies,the primary source of cash is from its customers.

The budget process is a loop that consists of ________.

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

List the budgets that are affected by the budgeted number of units to be produced.

The last step in the preparation of the master budget is the budgeted income statement.

A flexible budget is prepared to represent various levels of sales volume.

The most important part of a budgeting system is getting managers and employees to accept the budget.

The forecast of sales revenue is the cornerstone of the master budget.

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters