mgmt 201 ch 9 questions – Flashcards

42,500, If the desired ending inventory is 15,500 units, 42,500 units should be purchased. Use the t-account method using units instead of dollars: Inventory Beginning 21,000 Sales 48,000 Purchases 42,500 Ending 15,500

$68,000, The budgeted cash collections in March are $68,000. Collections March A|R Month Sales January February March January 80,000 80,000 x 20% = 16,000 80,000 x 50% = 40,000 80,000 x 30% = 24,000 February 60,000 - 60,000 x 20% = 12,000 60,000 x 50% = 30,000 18,000 March 70,000 - - 70,000 x 20% = 14,000 56,000 68,000 74,000

operating budgets, Budgets that plan a year's basic activities and the needed resources are called operating budgets. Operating budgets plan a year's basic activities and the needed resources. The financial budgets are the budgeted financial statements. Financial budgets determine the effects of operations and other financing activities on cash and financial position. The master budget is the culmination of all the budgets: combination of operating and financial budgets. The capital budget (capital expenditures budgets) is the budget of spending on capital investments (i.e. long-term assets).

$0, The budgeted purchases for September are $0. Desired ending balance $12,000 Required for sales ($150,000 x .6*) 90,000 Total required $102,000 Less beginning balance $112,000 Excess inventory $10,000 We are given the gross profit rate of 40%; therefore, the cost of goods sold rate (cost of inventory) must be 60% of sales.

$335, The budgeted cash receipts for June are $335, assuming credit sales are collected as follows: 15% in month of sale, 60% in the following month and 25% in the month after that. June: $70 + ($320 × 15%) + ($220 × 60%) + ($340 × 25%) = $335

$50,400, The budgeted gross profit for April in $50,400. (Round any decimals to the nearest whole dollar.) March April May June Sales increase $160,000 5% 3% 5% Sales $160,000 $160,000 x 105% = $168,000 $168,000 x 103% = $173,040 $173,040 x 105% = $181,692 CGS $160,000 x 70% = $112,000 $168,000 x 70% = $117,600 $173,040 x 70% = $121,128 $181,692 x 70% = $127,184 Gross Profit $48,000 $50,400 $51,912 $54,508

$382, The budgeted cash receipts for July are $382, assuming credit sales are collected as follows: 15% in month of sale, 60% in the following month and 25% in the month after that. July: $90 + ($300 × 15%) + ($320 × 60%) + ($220 × 25%) = $382

$114,500, The ending cash balance on November 30 is $114,500. Using the t-account method: Cash (November) Beginning 9,000 Sales (Oct) 200,000 x 70% = $140,000 Purchases (Oct) 100,000 x 75% = $75,000 Sales (Nov) 200,000 x 130% = $260,000 x 30% = $78,000 Purchases (Nov) 150,000 x 25% = $37,500 Ending 114,500

51,912, The budgeted gross profit for May is $51,912. (Round any decimals to the nearest whole dollar.) March April May June Sales increase $160,000 5% 3% 5% Sales $160,000 $160,000 x 105% = $168,000 $168,000 x 103% = $173,040 $173,040 x 105% = $181,692 CGS $160,000 x 70% = $112,000 $168,000 x 70% = $117,600 $173,040 x 70% = $121,128 $181,692 x 70% = $127,184 Gross Profit $48,000 $50,400 $51,912 $54,508

beginning cash, cash receipts and cash disbursements, The cash budget combines beginning cash, cash receipts and cash disbursements to determine whether there is an excess or deficiency of cash. Use the t-account method to determine an excess or deficiency of cash: Cash Beginning Cash Cash Receipts Cash disbursements/payments Ending Cash If ending cash is more than the required ending budgeted cash balance, there is an excess of cash and no borrowings, for example, would need to take place. If the ending cash balance is less than required, the company would likely need to borrow cash to make up for the deficiency in cash.

sales budget, purchases budget, cost of goods sold budget, operating expenses budget, and budgeted income statement. The financial budget is made up of the budgeted financial statements and the budgeted income statement is shared by both categories: operating budget and financial budget

Budgeted balance sheet is an example of a financial budget. The financial budgets are the cash budget, budgeted balance sheet and budgeted income statement. The sales budget and operating expense budget is included in the operating budget category.

Managers prepare short-term and long-term budgets is true regarding the budgeting process. Auditors have no interest or concern in a company's budgets. Budgets are internal documents used for making decisions for a company. Budgets are not used by external users to make decisions about a company. Budgeting is not prepared or designed by top management as they are least likely to have the information necessary to create the budgets and know the day-to-day operations.

90,000, The budgeted purchases for September if the company wishes to budget an inventory of $112,000 for the end of September are $90,000. Desired ending balance $112,000 Required for sales ($150,000 x .6*) 90,000 Total required $202,000 Less beginning balance $112,000 Purchases $90,000 We are given the gross profit rate of 40%; therefore, the cost of goods sold rate (cost of inventory) must be 60% of sales.

Budgeted income statement is an operating budget. The budgeted balance sheet and cash budgets are financial budgets. The capital expenditures budget is a type all its own.

11,500, If the company's minimum June 30 cash balance is $5,000, the budgeted amount to be borrowed during June is $11,500. The amount of borrowing is the cash available less the cash required: $7,200 + $53,800 - $67,500 - $5,000 = $11,500 (the cash deficiency).

54, 508, The budgeted gross profit for June is $54,508. (Round any decimals to the nearest whole dollar.) March April May June Sales increase $160,000 5% 3% 5% Sales $160,000 $160,000 x 105% = $168,000 $168,000 x 103% = $173,040 $173,040 x 105% = $181,692 CGS $160,000 x 70% = $112,000 $168,000 x 70% = $117,600 $173,040 x 70% = $121,128 $181,692 x 70% = $127,184 Gross Profit $48,000 $50,400 $51,912 $54,508

74,000, The budgeted accounts receivable balance on April 1 are $74,000. Collections March A|R Month Sales January February March January 80,000 80,000 x 20% = 16,000 80,000 x 50% = 40,000 80,000 x 30% = 24,000 February 60,000 - 60,000 x 20% = 12,000 60,000 x 50% = 30,000 60,000 - (12,000 + 30,000) = 18,000 March 70,000 - - 70,000 x 20% = 14,000 70,000 - 14,000 = 56,000 68,000 18,000 + 56,000 = 74,000

rolling budgets, Annual master budgets are expressed as 12 monthly target, wherein as one month ends, another month is added to the budget are called rolling budgets. Rolling or continuous budgets drop the past month and add on another month in the future in a nonstop process. This helps managers to think farther into the future than just the end of the fiscal year. An operating budget is a plan of the year's activities and needed resources. The master budget is a culmination of all the budgets of a business (i.e. sales budget, operating expenses budget, materials purchases, cash budget, capital budget, etc.).

$335, The budgeted cash receipts for June are $335, assuming credit sales are collected as follows: 15% in month of sale, 60% in the following month and 25% in the month after that. June: $70 + ($320 × 15%) + ($220 × 60%) + ($340 × 25%) = $335

2,3,1, Operating budget, capital expenditures budget and financial budget reflect the proper order of preparing components of the master budget. SME: The answer has been rewritten to form a meaningful sentence using the correct option. The operating budget is completed first, followed by the capital expenditures budget and then the financial budget. As the financial budget contains the budgeted financial statements, the other budgets must be prepared prior to the completion of these budgets.

130,000, The company should expect total cash collections from sales this month to equal $1

2,950, Budgeted purchases are 2,950. Use the t-account model using units: Inventory Beginning 850 2,300 Sales Purchases 2,950 Ending 1,500

65,000, The budgeted accounts receivable at May 31 would be $65,000. The ending accounts receivable balance should equal the beginning balance plus credit sales less collections. Accounts Receivable Beginning 64,000 Credit Sales 70,000 ($64,000 x 75%) + ($70,000 x 30%) = 69,000 Ending 65,000

master budget. The master budget is the culmination of all the budgets: combination of operating and financial budgets. Operating budgets plan a year's basic activities and the needed resources. The financial budgets are the budgeted financial statements. Financial budgets determine the effects of operations and other financing activities on cash and financial position. The capital budget (capital expenditures budgets) is the budget of spending on capital investments (i.e. long-term assets).

be less than cost of goods sold. Use the t-account method with random numbers: Inventory Beginning Inventory 100,000 300,000 Cost of Goods Sold Purchases 280,000 Ending Inventory 80,000 Purchases < Cost of Goods Sold