Question :
11) The budget period:
A) must be for one year.
B) can : 1230144
11) The budget period:
A) must be for one year.
B) can be for any length of time.
C) must be for one month.
D) is none of the above.
12) When reporting cash on the balance sheet, companies:
A) show each bank account separately.
B) combine cash with accounts receivable.
C) include any restricted amounts.
D) combine cash and cash equivalents.
13) Cash equivalents include all of the following EXCEPT:
A) time deposits.
B) high-grade government securities.
C) certificates of deposit.
D) stocks and bonds.
14) Under a compensating balance agreement:
A) the minimum compensating balance is considered a cash equivalent.
B) the compensating balance is available for day-to-day use.
C) the net result is that the actual interest rate is higher than the stated interest rate.
D) all of the above are true.
15) The Toy Store borrowed $12,000 from the bank and agreed to keep $3,000 on deposit at all times. The net result of this compensating balance agreement is that:
A) the Toy Store actually only borrowed $9,000.
B) the Toy Store actually only borrowed $3,000.
C) the actual interest rate is lower than the stated interest rate.
D) none of the above are true.
16) A company has a beginning cash balance of $3,000. For the year, the company estimates cash disbursements of $85,900. It has a desired ending cash balance of $5,500 and anticipates no new financing. The estimated cash receipts are:
A) $77,400
B) $79,900
C) $82,900
D) $88,400
3,000 + cash receipts – 85,900 = 5,500
Cash receipts = 88,400
17) The beginning cash balance is $3,000, estimated cash receipts are $105,000, and estimated cash disbursements are $111,000. How much cash must be borrowed to have a desired ending balance of $5,000?
A) $2,000
B) $6,000
C) $5,000
D) $8,000
18) A recent cash budget showed estimated cash receipts of $159,000, estimated cash disbursements of $155,000, and a desired ending cash balance of $6,000, with no borrowing of funds. The beginning cash balance was:
A) $2,000
B) $4,000
C) $10,000
D) unknown
19) The Candy Factory has the following items: cash in a checking account, $1,200; cash in a savings account, $4,390; high-grade government securities,$3,586; accounts receivable, $3209; cash in a compensating balance agreement, $3,200. How much should appear as Cash and Cash Equivalents on the balance sheet?
A) $4,786
B) $9,176
C) $12,385
D) $15,585
20) XYZ Company is preparing its cash budget for the upcoming year. It anticipates the following cash receipts and cash disbursements for the year:
Collections from customers$ 921,400
Cash paid for operating expenses360,000
Interest and dividends received on investments12,000
Sale of machinery for cash45,000
Purchase of inventory for cash407,000
Payment of interest expense14,000
Payment for land175,000
Payment of long-term debt23,000
Using the information above, prepare XYZ’s cash budget for the upcoming year. The cash balance at the beginning of the year is $46,400. he minimum cash balance according to management is $50,000.
