Question :
41. Cedar Furniture provided the following information relevant to its sales : 1208267
41. Cedar Furniture provided the following information relevant to its sales for December 2009 and the first quarter of 2011
Based on the company’s collection history, 2% of credit sales are uncollectible, 40% are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February 2010 are expected to be:
A. $30,000.
B. $81,200.
C. $114,000.
D. $173,200.
42. Homer Company expects credit sales for January to be $50,000. Cash sales are expected to be $30,000. The company expects credit and cash sales to increase 10% for the month of February. Credit sales are collected in the month following the month in which sales are made. Based on this information the amount of cash collections in February would be:
A. $88,000.
B. $80,000.
C. $85,000.
D. $83,000.
43. Which of the following items is not needed to prepare an inventory purchases budget for a merchandising business?
A. Expected sales
B. Beginning inventory
C. Expected unit selling price
D. Desired ending inventory
44. Coronet Company provided the following information related to its inventory sales and purchases for December 2009 and the first quarter of 2010:
Desired ending inventory levels are 25% of the following month’s projected cost of goods sold. Budgeted purchases of inventory in February 2010 would be:
A. $67,500.
B. $90,000.
C. $82,500.
D. $112,500.
45. Presidio Company provided the following information relevant to its inventory sales and purchases for December 2009 and the first quarter of 2010:
Desired ending inventory levels are 25% of the following month’s projected cost of goods sold. The company purchases all inventory on account. January 2010 budgeted purchases are $75,000. The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase.
Budgeted cash payments for inventory in February 2010 would be:
A. $66,300.
B. $79,500.
C. $49,500.
D. $76,300.
46. Skyland Company wants an ending inventory each month equal to 30% of that month’s cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $24,000. Based on this information, purchases for February would be:
A. $63,000.
B. $66,000.
C. $87,000.
D. $93,000.
47. Owl Company is in the process of preparing a purchases budget for the first quarter of 2010. The company has budgeted sales as follows:
Cost of goods sold is expected to be 75% of sales. The company would like to have ending inventory each month equal to 25% of the following month’s predicted cost of sales. The total cost of purchases in January is:
A. $118,500.
B. $93,000.
C. $88,876.
D. $71,438.
48. Sales for January are budgeted at 50,000 units, and the company expects sales to increase 7% each month. How many units will need to be purchased in February if the company’s policy is to keep ending inventory each month at 10,000 units?
A. 53,500 units
B. 58,500 units
C. 63,500 units
D. None of the other answers are correct.
49. Select the correct equation format for the purchases budget.
A. Beginning inventory + expected sales = required purchases.
B. Expected sales + desired ending inventory – beginning inventory = required purchases.
C. Beginning inventory + expected sales – desired ending inventory = required purchases.
D. Expected sales + desired ending inventory = required purchases.
50. The following budget information is available for the Arvada Company for January 2012:
All operating expenses are paid in cash in the month incurred. Compute total budgeted selling and administrative expenses (excluding interest) amount for January 2012.
A. $142,900
B. $141,500
C. $120,000
D. $131,250
