Question

Please show work

35. Highland Company has the following information:

Month Budgeted Sales
January $70,000
February 75,000
March 82,000
April 89,000

Budgeted Operating Expenses Per Month
Wages $20,000
Advertising 10,000
Depreciation 5,000
Other expenses 3% of sales

All cash expenses are paid as incurred. What are the total operating expenses budgeted for the month of February?
A) $30,000
B) $35,040
C) $37,250
D) $38,200

37. Saltine Company is preparing a cash budget for the month of June. The following information is available:

Cash Balance, May 31, 2017 $11,000
Cash collections from customers in June 43,000
Cash paid for land in June 10,000
Patent amortization expense in June 5,000
Cash paid for merchandise in June 20,000
Cash paid for operating expenses in June 20,000
Cash dividend paid in June 5,000

The minimum cash balance desired is $5,000. What is the deficiency of cash before financing at June 30, 2017?
A) $(5,000)
B) $(6,000)               
C) $(11,000)
D) $(12,000)

Answer 1

• All working forms part of the answer
• Question 35

A	February Sales	$           75,000.00
B = A x 3%	Other expenses	$             2,250.00
C	Wages	$           20,000.00
D	Advertising	$           10,000.00
E	Depreciation	$             5,000.00
F = B+C+D+E	Total Operating Expenses for February	$           37,250.00

Correct Answer = Option ‘C’ $ 37,250

• Question 37

Beginning Cash balance	$       11,000.00
Cash collected	$       43,000.00
Cash available		$        54,000.00
Less: Cash payments:
For Land	$       10,000.00
For merchandise	$       20,000.00
For operating expenses	$      20,000.00
For Dividends	$          5,000.00
Total Payments	$       55,000.00
Minimum balance required	$          5,000.00
Total		$        60,000.00
Deficiency of Cash		$        (6,000.00)

Correct Answer = Option ‘B’ $ (6,000)