Valentina Company will begin operations on January 1st.The company has provided the following details concerning budgeted sales: Budgeted Sales \[\begin{array} { l l } \text { Jan } & \$ 75,000 \\ \text { Feb } & 69,000 \\ \text { March } & 80,000 \\ \text { April } & 62,000 \\ \text { May } & 80,500 \\ \text { June } & 92,000 \end{array}\] The collection policy of the company is to collect 20% in the month of sale,40% in the following month,and remaining 40% in the second month after the month of sale.All sales are made on account. Calculate the cash receipts from customers for the first six months.

Calculation of cash receipts for the fir

Clyde,Inc.has a cash balance of $20,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: \[\begin{array} { | l | r | r | r | } \hline & { \text { Apr } } & { \text { May } } & { \text { Jun } } \\ \hline \text { Cash collections } & \$ 24,000 & \$ 24,000 & \$ 24,000 \\ \hline \text { Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 6000 & 5800 & 5000 \\ \hline \text { Operating expenses } & 3500 & 5000 & 4600 \\ \hline \end{array}\] There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of April.

A) $44,000 B) $34,500 C) $24,000 D) $38,000 A) $44,000 B) $34,500 C) $24,000 D) $38,000

Jager Corp.has prepared a preliminary cash budget for the third quarter as shown below: \[\begin{array} { | l | r | r | r | } \hline \text { Cash Budget } & { \text { Jul } } &{ \text { Aug } } &{ \text { Sep } } \\ \hline \text { Beginning cash balance } & \$ 36,000 & \$ 11,400 & \$ 16,900 \\ \hline \text { Plus: Cash collections } & \$ 49,400 & \$ 53,000 & \underline { 44,800 } \\ \hline \text { Cash available } & 85,400 & \$ 64,400 & \$ 61,700 \\ \hline \text { Less: Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 35,000 & 9000 & 11,000 \\ \hline \text { Operating expenses } & 39,000 & 30,500 & 30,700 \\ \hline \text { Capital expenditures } & \underline { 0 } & \underline { 8000 } & \underline { 7000 } \\ \hline \text { Ending cash balance } & \$ 11,400 & \$ 16,900 & \$ 13,000 \\ \hline \end{array}\] Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $57,000 in July,$56,000 in August,and $44,000 in September.Based on the new data,calculate the new projected cash balance at the end of September.

A) $27,500 B) $13,000 C) $19,000 D) $22,800 A) $27,500 B) $13,000 C) $19,000 D) $22,800

Teleco Corp.is preparing its budget for the first quarter of 2018.The following data is provided: \[\begin{array} { | l | r | r | r | } \hline { \text { Inventory, Purchases, and COGS Budget } } &{ \text { Jan } } & { \text { Feb } } & { \text { March } } \\ \hline \text { Cost of goods sold (a) } & \$ 34,000 & \$ 27,000 & \$ 22,500 \\ \hline \text { Desired ending inventory (b) } & \underline { 11,750 } & \underline { 10,625 } & ? \\ \hline \text { Total inventory required } & 45,750 & 37,625 & \\ \hline \text { Less: Beginning inventory } & \underline { ( 20,000 } & \underline { ( 11,750 } & \\ \hline \text { Budgeted Purchases } & \$ \underline { 25,750 } & \$ \underline { 25,875 } & \\ \hline \text { (a) COGS } = 75 \% \text { of sales } & & & \\ \hline \text { (b) } \$ 5000 + 25 \% \text { of COGS for next month } & & & \\ \hline \end{array}\] April's cost of goods sold is $32,000.The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be ________.

A) $10,625 B) $11,750 C) $34,000 D) $13,000 A) $10,625 B) $11,750 C) $34,000 D) $13,000

Tadeo Corp.has provided a part of its budget for the second quarter: \[\begin{array} { | l | r | r | r | } \hline & { \text { Apr } } & { \text { May } } &{ \text { Jun } } \\ \hline \text { Cash collections } & \$ 42,000 & \$ 40,000 & \$ 45,000 \\ \hline \text { Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 6000 & 7000 & 5000 \\ \hline \text { Operating expenses } & 7000 & 9000 & 7000 \\ \hline \text { Capital expenditures } & 0 & 4600 & 4000 \\ \hline \end{array}\] The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

A) $62,400 B) $83,000 C) $56,000 D) $20,600 A) $62,400 B) $83,000 C) $56,000 D) $20,600

Lyon Corp.has provided a part of its budget for the second quarter: \[\begin{array} { | l | r | r | r | } \hline &{ \text { Apr } } &{ \text { May } } & { \text { Jun } } \\ \hline \text { Cash collections } & \$ 43,000 & \$ 45,000 & \$ 50,000 \\ \hline \text { Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 7200 & 5000 & 7000 \\ \hline \text { Operating expenses } & 6000 & 7900 & 7000 \\ \hline \text { Capital expenditures } & 4000 & 4600 & 20,000 \\ \hline \end{array}\] The cash balance on April 1 is $12,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

A) $115,300 B) $37,800 C) $81,300 D) $65,300 A) $115,300 B) $37,800 C) $81,300 D) $65,300

Exam 22: Master Budgets

Kuzma Foods,Inc.has budgeted sales for June and July at $680,000 and $750,000,respectively.Sales are 90% credit,of which 70% is collected in the month of sale and 30% is collected in the following month.What is the budgeted Accounts Receivable balance on July 31?

(Multiple Choice)

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Question 101

Zelia,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $50,000 in January,$60,000 in February,and $70,000 in March.Variable and fixed expenses are as follows: Variable Expenses: Power cost (20% of sales) Miscellaneous expenses: (5% of sales) Fixed Expenses: Salaries expense: $8000 per month Rent expense: $5000 per month Depreciation expense: $1400 per month Power cost/fixed portion: $500 per month Miscellaneous expenses/fixed portion: $1000 per month Using the information above,calculate the amount of budgeted selling and administrative expenses for the month of February.

(Multiple Choice)

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Question 102

Which of the following is TRUE of participative budgeting?

(Multiple Choice)

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Question 103

Valentina Company will begin operations on January 1st.The company has provided the following details concerning budgeted sales: Budgeted Sales Jan \ 75,000 Feb 69,000 March 80,000 April 62,000 May 80,500 June 92,000 The collection policy of the company is to collect 20% in the month of sale,40% in the following month,and remaining 40% in the second month after the month of sale.All sales are made on account. Calculate the cash receipts from customers for the first six months.

(Essay)

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(80)

Question 104

Tomo,Inc.has prepared its third quarter budget and provided the following data: Jul Aug Sep Cash collections \ 50,000 \ 39,900 \ 46,000 Cash payments: Purchases of direct materials 31,000 22,000 17,500 Operating expenses 12,200 8700 11,300 Capital expenditures 13,600 24,300 0 The cash balance on June 30 is projected to be $4500.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.Calculate the final projected cash balance at the end of August taking into consideration all the financing transactions.

(Multiple Choice)

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Question 105

Budgets provide a benchmark that motivates employees and helps managers evaluate performance.

(True/False)

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Question 106

Clyde,Inc.has a cash balance of $20,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: Apr May Jun Cash collections \ 24,000 \ 24,000 \ 24,000 Cash payments: Purchases of direct materials 6000 5800 5000 Operating expenses 3500 5000 4600 There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of April.

(Multiple Choice)

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Question 107

A manufacturing 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 ________.

(Multiple Choice)

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Question 108

Pearl,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $45,000 in January,$55,000 in February,and $65,000 in March.Variable and fixed selling and administrative expenses are as follows: Variable Expenses: Power cost (20% of sales) Miscellaneous expenses: (10% of sales) Fixed Expenses: Salaries expense: $6000 per month Rent expense: $5000 per month Depreciation expense: $1400 per month Power cost/fixed portion: $600 per month Miscellaneous expenses/fixed portion: $1200 per month Calculate total budgeted selling and administrative expenses for the month of January.

(Multiple Choice)

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Question 109

Which of the following is an example of the planning function of the budgeting process?

(Multiple Choice)

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Question 110

Jager Corp.has prepared a preliminary cash budget for the third quarter as shown below: Cash Budget Jul Aug Sep Beginning cash balance \ 36,000 \ 11,400 \ 16,900 Plus: Cash collections \ 49,400 \ 53,000 Cash available 85,400 \ 64,400 \ 61,700 Less: Cash payments: Purchases of direct materials 35,000 9000 11,000 Operating expenses 39,000 30,500 30,700 Capital expenditures Ending cash balance \ 11,400 \ 16,900 \ 13,000 Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $57,000 in July,$56,000 in August,and $44,000 in September.Based on the new data,calculate the new projected cash balance at the end of September.

(Multiple Choice)

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Question 111

Which of the following describes the cash budget?

(Multiple Choice)

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Question 112

Teleco 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) \ 34,000 \ 27,000 \ 22,500 Desired ending inventory (b) ? Total inventory required 45,750 37,625 Less: Beginning inventory Budgeted Purchases \ \ (a) COGS =75\% of sales (b) \ 5000+25\% of COGS for next month April's cost of goods sold is $32,000.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 113

Tadeo Corp.has provided a part of its budget for the second quarter: Apr May Jun Cash collections \ 42,000 \ 40,000 \ 45,000 Cash payments: Purchases of direct materials 6000 7000 5000 Operating expenses 7000 9000 7000 Capital expenditures 0 4600 4000 The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

(Multiple Choice)

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Question 114

List the three sections of the cash budget for a manufacturer.

(Essay)

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Question 115

The capital expenditures budget represents the company's plan for purchasing the long-term assets.

(True/False)

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Question 116

Which of the following statements regarding capital expenditures is incorrect?

(Multiple Choice)

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Question 117

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the actual direct labor cost per hour.

(True/False)

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Question 118

A master budget is a financial plan for a specific segment of an organization.

(True/False)

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Question 119

Lyon Corp.has provided a part of its budget for the second quarter: Apr May Jun Cash collections \ 43,000 \ 45,000 \ 50,000 Cash payments: Purchases of direct materials 7200 5000 7000 Operating expenses 6000 7900 7000 Capital expenditures 4000 4600 20,000 The cash balance on April 1 is $12,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

(Multiple Choice)

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Question 120

Kuzma Foods,Inc.has budgeted sales for June and July at $680,000 and $750,000,respectively.Sales are 90% credit,of which 70% is collected in the month of sale and 30% is collected in the following month.What is the budgeted Accounts Receivable balance on July 31?

Which of the following is TRUE of participative budgeting?

Budgets provide a benchmark that motivates employees and helps managers evaluate performance.

A manufacturing 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 ________.

Which of the following is an example of the planning function of the budgeting process?

Which of the following describes the cash budget?

List the three sections of the cash budget for a manufacturer.

The capital expenditures budget represents the company's plan for purchasing the long-term assets.

Which of the following statements regarding capital expenditures is incorrect?

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the actual direct labor cost per hour.

A master budget is a financial plan for a specific segment of an organization.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

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