91. A Company is preparing a cash budget for June. The company has $67,000 cash at the beginning of June and anticipates $82,330 in cash receipts and $93,520 in cash disbursements during June. This company has an agreement with its bank to maintain a cash balance of at least $65,000. As of May 31, the company owes $25,000 to the bank. To maintain the $65,000 required balance, during June the company must:A.  Borrow $9,190B.  Repay $13,190C.  Borrow $25,000D.  Repay $25,000E.  Repay $9,190

Reference: 20_02

Julia's Candy Co. reports the following information from its sales account and sales budget: 

Sales

May

$105,000

June

93,000

Expected Sales:

July

$90,000

August

110,000

September

120,000

Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale.

92. Based on the information from Julia’s, the total amount of cash expected to be received from customers in September is:A.  $30,000B.  $82,500C.  $112,500D.  $120,000E.  $202,500

93. Based on the information from Julia’s, the total amount of cash expected to be received from customers in July is:

A. $69,750

B. $90,000

C. $92,250

D. $22,500

E. $115,500

94. If Julia’s pays sales commission of 10% each month, in addition to monthly fixed costs of $4,000, what are selling expenses for the third quarter?

A. $32,000

B. $36,000

C. $40,000

D. $44,000

E. $48,000

95. A company reports the following information from its sales account and sales budget: 

Sales

May

$52,000

June

47,000

Expected Sales:

July

$45,000

August

55,000

September

60,000

Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is:A.  $58,500B.  $56,500C.  $60,000D.  $80,500E.  $55,000

96. Lara Company has budgeted the following credit sales during the current year:  September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 20% in the month of sale, 60% in the first month after sale, and 20% in the second month after sale. What will be the balance in Accounts Receivable at the end of November assuming the payment patterns have been as described?A.  $26,600B.  $31,200C.  $33,800D.  $39,600E.  $25,200

97. Lara Company has budgeted the following credit sales during the current year:  September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to collect in November as a result of current and past credit sales?A.  $19,700B.  $28,500C.  $30,000D.  $31,100E.  $33,900

98. In preparing a budgeted balance sheet, the amount for Accounts Receivable is primarily determined from:A.  The purchase budget.B.  The sales budget.C.  The capital expenditures budget.D.  The budgeted income statement.E.  The selling expenses budget.

99. Long-term liability data for the budgeted balance sheet is derived from:A.  The cash budget and capital expenditures budget.B.  The cash budget and sales budget.C.  The cash budget and budgeted income statement.D.  The sales budget and production budget.E.  The asset budget and debt budget.

100. In preparing financial budgets:A.  The budgeted balance sheet is usually prepared last.B.  The cash budget is usually not prepared.C.  The budgeted income statement is usually not prepared.D.  The capital expenditures budget is usually prepared last.E.  The merchandise purchases budget is key.

126.In preparing a company's statement of cash flows for the year just ended, the following information is available: 

A.$147,000 of net cash used.

B.$26,000 of net cash used.

C.$347,000 of net cash used.

D.$51,000 of net cash used.

E.$340,000 of net cash used.

127.In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available: 

A.$438,000 of net cash used.

B.$438,000 of net cash provided.

C.$264,000 of net cash used.

D.$351,000 of net cash used.

E.$264,000 of net cash provided.

128.In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: 

A.$230,000 of net cash used.

B.$230,000 of net cash provided.

C.$108,000 of net cash used.

D.$138,000 of net cash used.

E.$138,000 of net cash provided.

129.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:    

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

130.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:   

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

131.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:    

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

132.Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?   

A.Credit sales.

B.Cash collections from customers.

C.Depreciation expense.

D.Cash received from the sale of a building.

E.Cash received from the sale of treasury stock.

133.When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:   

A.The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method.

B.A reconciliation of net income to net cash provided or used by operating activities.

C.Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities.

D.The income statement to be prepared under the cash basis of accounting.

E.Noncash investing and financing activities be included in the statement of cash flows.

134.All of the following statements related to reporting cash flows from operating activities under U.S. GAAP and IFRS are true except:   

A.The definition of cash and cash equivalents is similar for U.S. GAAP and IFRS.

B.U.S. GAAP requires cash flows from interest revenue and dividend revenue be classified as operating activities.

C.IFRS permits classification of interest revenue and dividend revenue under operating or investing activities.

D.U.S. GAAP requires cash outflows for interest expense to be classified as financing activities.

E.IFRS permits classification of interest expense under operating or financing activities.

135.All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:   

A.Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method.

B.IFRS permits classification of cash outflows for interest expense under operating or financing based on which one results in better cash flows from operating activities.

C.U.S. GAAP requires cash outflows for income tax be classified as operating activities.

D.IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax.

E.IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.

126.In preparing a company's statement of cash flows for the year just ended, the following information is available: 

A.$147,000 of net cash used.

B.$26,000 of net cash used.

C.$347,000 of net cash used.

D.$51,000 of net cash used.

E.$340,000 of net cash used.

127.In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available: 

A.$438,000 of net cash used.

B.$438,000 of net cash provided.

C.$264,000 of net cash used.

D.$351,000 of net cash used.

E.$264,000 of net cash provided.

128.In preparing a company's statement of cash flows for the most recent year, Ransom Corp. reported the following information: 

A.$230,000 of net cash used.

B.$230,000 of net cash provided.

C.$108,000 of net cash used.

D.$138,000 of net cash used.

E.$138,000 of net cash provided.

129.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from operating activities generally affect:    

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

130.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:   

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

131.When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect:    

A.Net income, current assets, and current liabilities.

B.Noncurrent assets.

C.Noncurrent liability and equity accounts.

D.Both noncurrent assets and noncurrent liabilities.

E.Equity accounts only.

132.Which of the following transactions or events should be reported as a source of cash from operating activities when using the direct method?   

A.Credit sales.

B.Cash collections from customers.

C.Depreciation expense.

D.Cash received from the sale of a building.

E.Cash received from the sale of treasury stock.

133.When the operating activities section of the statement of cash flows is reported using the direct method, the FASB requires:   

A.The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method.

B.A reconciliation of net income to net cash provided or used by operating activities.

C.Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities.

D.The income statement to be prepared under the cash basis of accounting.

E.Noncash investing and financing activities be included in the statement of cash flows.

134.All of the following statements related to reporting cash flows from operating activities under U.S. GAAP and IFRS are true except:   

A.The definition of cash and cash equivalents is similar for U.S. GAAP and IFRS.

B.U.S. GAAP requires cash flows from interest revenue and dividend revenue be classified as operating activities.

C.IFRS permits classification of interest revenue and dividend revenue under operating or investing activities.

D.U.S. GAAP requires cash outflows for interest expense to be classified as financing activities.

E.IFRS permits classification of interest expense under operating or financing activities.

135.All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:   

A.Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method.

B.IFRS permits classification of cash outflows for interest expense under operating or financing based on which one results in better cash flows from operating activities.

C.U.S. GAAP requires cash outflows for income tax be classified as operating activities.

D.IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax.

E.IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.

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