Question : 31.Oakton Furniture provided the following information relevant to its sales : 1257177

 

 

31.Oakton Furniture provided the following information relevant to its sales for December 2013 and the first quarter of 2014  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 2014 are expected to be:   

A. $60,000.

 

B. $162,400.

 

C. $346,400.

 

D. $228,000.

 

 

32.Hernandez Company expects credit sales for January to be $100,000. Cash sales are expected to be $60,000. 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. $166,000.

 

B. $160,000.

 

C. $170,000.

 

D. $176,000.

 

 

33.Which of the following items is not needed to prepare an inventory purchases budget for a merchandising business?   

A. Expected unit selling price

 

B. Beginning inventory

 

C. Expected unit sales

 

D. Desired ending inventory

 

 

34.Chu Company provided the following information related to its inventory sales and purchases for December 2013 and the first quarter of 2014:  Desired ending inventory levels are 25% of the following month’s projected cost of goods sold. Budgeted purchases of inventory in February 2014 would be:   

A. $135,000.

 

B. $165,000.

 

C. $180,000.

 

D. $225,000.

 

 

35.Payne Company provided the following information relevant to its inventory sales and purchases for December 2013 and the first quarter of 2014:  Desired ending inventory levels are 25% of the following month’s projected cost of goods sold. The company purchases all inventory on account. January 2014 budgeted purchases are $150,000. 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 2014 would be:   

A. $132,600.

 

B. $152,600.

 

C. $99,000.

 

D. $159,000.

 

 

36.Skymont 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 $45,000. Ending inventory at the end of January was $12,000. Based on this information, purchases for February would be:   

A. $31,500.

 

B. $46,500.

 

C. $43,500.

 

D. $33,000.

 

 

37.O’Hare Company is in the process of preparing a purchases budget for the first quarter of 2014. 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. $35,719.

 

B. $46,500.

 

C. $44,438.

 

D. $59,250.

 

 

38.Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% 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. 52,000 units

 

B. 54,000 units

 

C. 62,000 units

 

D. None of these answers is correct.

 

 

39.Select the correct equation format for the purchases budget.   

A. Beginning inventory + expected sales = required purchases.

 

B. Cost of budgeted sales + beginning inventory – desired ending inventory = required purchases.

 

C. Beginning inventory + expected sales – desired ending inventory = required purchases.

 

D. Cost of budgeted sales + desired ending inventory – beginning inventory = required purchases.

 

 

40.The following budget information is available for the Arch Company for January 2014:  All operating expenses are paid in cash in the month incurred. Compute total budgeted selling and administrative expenses (excluding interest) amount for January 2014.   

A. $262,500

 

B. $283,000

 

C. $240,000

 

D. $285,800