Question :
71. Upton Products Inc. would like to prepare a summary cash : 1295647
71. Upton Products Inc. would like to prepare a summary cash budget for the first quarter of 2008. The following information regarding operating activities from the cash receipts and cash disbursements budgets are available:
January
February
March
Cash receipts
$15,000
$23,000
$34,000
Cash disbursements
13,000
26,000
30,000
The following information is also available:
·
The cash balance on January 1, 2008 was $2,000.
·
Equipment costing $4,000 will be purchased in February. A down payment of $1,000 will be made in February and payments of $1,000 will be made in each subsequent month thereafter.
·
Dividends in the amount of $2,000 will be paid in March.
What is the cash balance at the end of March expected to be? A. $(1,000)B. $ 0C. $ 1,000D. $ 2,000
72. Diamonde Products Inc. would like to prepare a summary cash budget for the second quarter of 2008. The following information regarding operating activities from the cash receipts and cash disbursements budgets are available:
April
May
June
Cash receipts
$10,000
$16,000
$25,000
Cash disbursements
8,000
18,000
16,000
The following information is also available:
·
The cash balance on March 31, 2008 was $3,000.
·
Equipment costing $6,000 will be purchased in May. A down payment of $2,000 will be made in May and payments of $2,000 will be made in each subsequent month thereafter until the equipment is paid in full.
·
Dividends in the amount of $1,000 will be paid in June.
What is the cash balance at the end of June expected to be? A. $1,000B. $7,000C. $4,000D. $5,000
73. Vela Enterprises Inc. would like to prepare a summary cash budget for March. The following information is available:
·
The cash balance at March 1 was estimated to be $3,000.
·
March sales, all on account, were estimated to be $50,000. Sales are collected over a two-month period with 65 percent collected in the month of sale and the remainder in the subsequent month. February sales on account were $60,000.
·
Inventory purchases are expected to be $20,000 in March. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. February’s purchases were $18,000.
·
Cash disbursements for selling and administrative expenses are expected to be $4,000 in March.
·
Depreciation expense for March is expected to be $5,000.
·
Loan and interest payments for March are expected to be $25,000.
What is the cash balance at the end of March expected to be? A. $ 8,500B. $(3,500)C. $ 3,500D. $26,500
74. Avery Inc. would like to prepare a summary cash budget for June. The following information is available:
·
The cash balance at June 1 was estimated to be $6,000.
·
June sales, all on account, were estimated to be $75,000. Sales are collected over a two-month period with 60 percent collected in the month of sale and the remainder in the subsequent month. May sales on account were $70,000.
·
Inventory purchases are expected to be $50,000 in June. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. May purchases were $60,000.
·
Cash disbursements for selling and administrative expenses are expected to be $9,000 in June.
·
Depreciation expense for June is expected to be $3,000.
What is the cash balance at the end of June expected to be? A. $15,000B. $12,000C. $26,000D. $29,000
75. Which of the following statements is false regarding a company’s budgeted financial statements? A. They are used for internal planning purposes.B. They are often called pro forma financial statements.C. Lending institutions should not use them as a basis for granting a loan.D. An error in the preparation of one budget often effects one or more other budgets.
76. Which of the following would not appear on a budgeted income statement? A. Net incomeB. Depreciation expenseC. Cost of goods soldD. Cash received from bank loan.
77. For a manufacturing company, which of the following budgets does not have to be prepared before a budgeted income statement is prepared? A. Budgeted cost of goods manufacturedB. Budgeted cost of goods soldC. Budgeted balance sheetD. Sales budget
78. For companies that operate in a just-in-time (JIT) environment, which two budgets are essentially the same? A. Direct materials and production budgetsB. Sales and production budgetsC. Sales and cash receipts budgetsD. Direct materials and manufacturing overhead budgets
79. Which of the following budgets would be prepared by both manufacturing companies and merchandising companies? A. Production BudgetsB. Direct Material Purchases BudgetC. Sales BudgetD. Manufacturing Overhead Budget
80. Which of the following budgets would be prepared by manufacturing companies but not merchandising companies? A. Sales BudgetB. Cash Receipts BudgetC. Production BudgetD. Selling and Administrative Expenses Budget
