Question : 61. Cicero Manufacturing Inc. sells gloves at local ski resorts during : 1295646

 

 

61. Cicero Manufacturing Inc. sells gloves at local ski resorts during the winter months. Each pair of gloves sells for $15. The following sales forecast (in units) has been prepared for October 2005 through March 2008: 

 

October

500

 

November

800

 

December

1,000 

 

January

1,200 

 

February

900

 

March

600

 

 

 

Historically, the cash collection of sales has been as follows: 60 percent in the month of sale, 35 percent in the month following sale, and 4 percent in the second month following sale. The remaining 1 percent is uncollectible.Cash receipts for January are expected to be: A. $13,170B. $51,975C. $10,800D. $16,530

 

62. Taylor Inc. sells and installs residential water heaters. Its customers pay for their water heaters over four months by paying in equal, monthly installments. The sales price of an installed water heater is $600. Taylor sold and installed the following number of water heaters in the first six months of 2008: 

 

January

80 units

 

February

100 units

 

March

70 units

 

April

84 units

 

May

90 units

 

June

75 units

 

 

 

Cash receipts for June are expected to be: A. $  74,850B. $118,050C. $  47,850D. $191,400

 

63. Browning Inc. has projected the following sales information for the fourth quarter of 2008: 

 

October

November

December

Cash sales

$ 19,000

$ 26,000

$ 32,000

Credit sales

35,000

45,000

60,000

Total sales

$ 54,000

$ 71,000

$ 92,000

 

 

 

 

Credit sales are collected over a two-month period, with 60 percent collected in the month of sale and 40 percent collected in the month following sale.Total cash collections for December are: A. $86,000B. $54,000C. $83,600D. $68,000

 

64. Boylan Inc. has projected the following sales information for the first quarter of 2008: 

 

January

February

March

Cash sales

$ 20,000

$ 35,000

$ 40,000

Credit sales

43,000

57,000

55,000

Total sales

$ 63,000

$ 92,000

$ 95,000

 

 

 

 

Credit sales are collected over a two-month period, with 55 percent collected in the month of sale and 45 percent collected in the month following sale.Total cash collections for March are: A. $55,900B. $93,650C. $70,250D. $95,900

 

65. Becham Inc. had the following purchases budgeted for the last quarter of 2008: 

 

October

$75,000

 

November

90,000

 

December

84,000

 

 

 

Becham pays one-half of a month’s purchases in the month of purchase and the remainder in the following month. What are expected cash disbursements for the month of December? A. $124,500B. $  84,000C. $  87,000D. $  42,000

 

66. Holmes Manufacturing Inc. had the following purchases budgeted for the last six months of 2008: 

 

July

$60,000

 

August

45,000

 

September

52,000

 

October

60,000

 

November

80,000

 

December

85,000

 

 

 

Holmes pays one-half of a month’s purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2008? A. $112,500B. $225,000C. $182,500D. $208,500

 

67. Merrell Enterprises had the following purchases budgeted for the last six months of 2008: 

 

July

$100,000

 

August

80,000

 

September

90,000

 

October

70,000

 

November

90,000

 

December

100,000

 

 

 

Merrell pays one-half of a month’s purchases in the month of purchase and the remainder in the following month. What are expected total cash disbursements for the last quarter of 2008? A. $210,000B. $255,000C. $130,000D. $260,000

 

68. In December of 2007, Jones Inc. was formed as a corporation. The company plans to start its operations in early January of 2008. They have the following purchases budgeted for the first quarter of 2008: 

 

January

$600,000

 

February

500,000

 

March

300,000

 

 

 

Jones has worked out agreements with its various suppliers to pay for one-fourth of a month’s purchases each month, beginning in the month of purchase, until the purchases are paid in full. No purchases were made prior to January.What are total cash disbursements expected for the first quarter of 2008? A. $425,000B. $625,000C. $775,000D. $350,000

 

69. In September of 2008, Mitford Products Inc. began doing business as a corporation. The company plans to start making its first purchases in October of 2008. They have the following purchases budgeted for the last quarter of 2008: 

 

October

$850,000

 

November

600,000

 

December

720,000

 

 

 

Mitford has worked out agreements with its various suppliers to pay for one-third of a month’s purchases each month, beginning in the month of purchase, until the purchases are paid in full. No purchases were made prior to October.What are expected total cash disbursements for the last quarter of 2008? A. $1,490,000B. $   723,333C. $1,006,667D. $1,446,667

 

70. Griswald Inc. would like to prepare a summary cash budget for the first quarter of 2008. The following information from the cash receipts and cash disbursements budgets are available: 

 

January

February

March

Cash receipts

$50,000

$72,000

$80,000

Cash disbursements

42,000

75,000

71,000

 

 

 

 

The company has a beginning cash balance on January 1, 2008 of $5,000. No other receipts and disbursements in the first quarter are expected. What is the cash balance at the end of March expected to be? A. $14,000B. $19,000C. $  9,000D. $34,000

 

 

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