Question

answere 1 to 5

1) Actual sales in Ward Company were $30,000 in June, S50,000 in July and $70,000 in August. Sales in September are expected to be $60,000. Thirty percent of a month's sales are collected in the month of sale, 50% in the first month after sale, 15% in the second month after sale, and the remaining 5% is uncollectible. Budgeted cash receipts for September should be a) $60,500. b) $62,000. c) $57,000. d) $70,000. 2) Archer Company has budgeted sales of 30,000 units in April, 40,000 units in May and 60,000 units in June. The company has 6,000 units on hand on April 1. If the company requires ending inventory equal to 20% of the following month's sales, production during May should be a) 32,000 units. b) 44,000 units. c) 36,000 units. d) 40,000 units. 3) If the beginning cash balance is $25,000, the required ending cash balance is $10,000, cash disbursements are $140,000, and cash collections from customers are $110,000, the compan must borrow a) $10,000. b) $30,000. c) $15,000. d) $25,000. 4) Which one of the following statements about participative budgeting is incorrect? a) It often leads to more accurate and reliable estimates. b) Motivation is usually higher. c) It recognizes individuals at all levels of the organization as members of the team. d) They will always be very difficult to achieve. 5) Beecher Inc. is planning to purchase inventory for resale costing $90,000 in October, $70,000 in November, and $40,000 in December. The company pays for 40% of its purchases in the month of purchase and 60% in the month following purchase. What would be the budgeted cash disbursements for purchases of inventory in December? a) $40,000. b) $70,000. c) $58,000. d) $200,000.

Answer 1

1. a) $60,500

Computation = ($60,000*30%) + ($70,000*50%) + ($50,000*15%) = $60,500

2. b) 44,000 units

Computation = Sales + closing - opening units

= 40,000 + (60,000*20%) - (40,000*20%)

= 44,000

3. c) $15,000

Computation = Beginning + Collection - Closing - Disbursement

= 25,000+110,000-10,000-140,000

= $15,000

4. d) They will always be very difficult to achieve.

5. c) $58,000

Computation = ($40,000*40%) + ($70,000*60%) = $58,000

Please give a Thumbs up ?. Thanks!!