Question

1.)

If budgeted beginning inventory is $8,800, budgeted ending inventory is $10,000, and budgeted cost of goods sold is $10,760, budgeted purchases should be:

$1,960

$760

$11,960

$1,200

$9,560

2.)

Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
a.	Beginning cash balance on June 1, $94,900.
b.	Cash receipts from sales, $417,500.
c.	Budgeted cash disbursements for purchases, $272,500.
d.	Budgeted cash disbursements for salaries, $95,900.
e.	Other budgeted cash expenses, $57,900.
f.	Cash repayment of bank loan, $32,900.
g.	Budgeted depreciation expense, $34,900.

$86,100.

$111,100.

$53,200.

$76,200.

$18,300.

3.)

Calgary Industries is preparing a budgeted income statement for 2015 and has accumulated the following information. Predicted sales for the year are $735,000 and cost of goods sold is 40% of sales. The expected selling expenses are $81,500 and the expected general and administrative expenses are $90,500, which includes $23,500 of depreciation. The companies income tax rate is 30%. The budgeted net income for 2015 is:

$441,000.

$188,300.

$269,000.

$84,800.

$80,700.

4.)

Memphis Company's May sales budget calls for sales of $870,000. The store expects to begin May with $47,000 of inventory and to end the month with $52,000 of inventory. Gross margin is typically 40% of sales. Compute the budgeted cost of merchandise purchases for May.

$517,000.

$527,000.

$522,000.

$348,000.

$353,000.

Answer 1

1.

Cost of goods sold	$ 10,760
Add: Budgeted ending inventory	$ 10,000
Less: Budgeted beginning inventory	$ (8,800)
Estimated purchases	$ 11,960

Answer is C. $11,960

2.

beginning cash balance	$      94,900
Add: Cash receipts	$   417,500
Less: Cash disbursments for purchases	$ (272,500)
Less: Cash disbursments for salaries	$   (95,900)
Less: Other budgeted cash expenses	$   (57,900)
Less; Cash repayment of bank loan	$   (32,900)
Ending cash balance	$      53,200

Answer is C

3.

Sales	$   735,000
Less: Cost of goods sold ($735,000*40%)	$ (294,000)
Less: Selling expenses	$   (81,500)
Less: General and administrative expenses	$   (90,500)
Income before income income tax	$   269,000
Less: Income tax expenses ($269,000*30%)	$   (80,700)
Net income	$   188,300

Answer is B

4.

Cost of goods sold ($870,000*60%)	$ 522,000
Add: Ending inventory	$    52,000
Less: beginning inventory	$ (47,000)
Budgeted purchases	$ 527,000

Answer is B