Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Upton Products Inc would like to prepare a summary cash budget for the first quarter of

Upton Products Inc would like to prepare a summary cash budget for the first quarter of

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. $        0
C. $ 1,000
D. $ 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. $1,000
B. $7,000
C. $4,000
D. $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. $  8,500
B. $(3,500)
C. $  3,500
D. $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. $15,000
B. $12,000
C. $26,000
D. $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 income
B. Depreciation expense
C. Cost of goods sold
D. 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 manufactured
B. Budgeted cost of goods sold
C. Budgeted balance sheet
D. 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 budgets
B. Sales and production budgets
C. Sales and cash receipts budgets
D. Direct materials and manufacturing overhead budgets

 

79. Which of the following budgets would be prepared by both manufacturing companies and merchandising companies? 
A. Production Budgets
B. Direct Material Purchases Budget
C. Sales Budget
D. Manufacturing Overhead Budget

 

80. Which of the following budgets would be prepared by manufacturing companies but not merchandising companies? 
A. Sales Budget
B. Cash Receipts Budget
C. Production Budget
D. Selling and Administrative Expenses Budget

Jan 09 2020 View more View Less

Answer (UnSolved)

question Get Solution

Related Questions