The following information is for questions 2 until 10: Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. • Collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible. • The cost of goods sold is 80% of sales. • The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,700. Monthly depreciation is $17,000. Ignore taxes. Statement of Financial Position October 31 Assets: Cash. 2$ 28.000 Accounts receivable (net of allowance for uncollectible accounts). 78.000 Inventory Property, plant and equipment (net of $640.000 accumulated depreciation).. Total assets. 104.000 1.132.000 $1.342.000 Liabilities and Stockholders Equity: Accounts payable $200.000 Common stock 800.000 Retained earnings Total liabilities and stockholders' equity 342.000 $1.342.000 2. Expected cash collections in December are: A. $126,500 B. $230,500 C. $104,000 D. $230,000 3. The cost of December merchandise purchases would be: A. $176,000 B. $208,000 C. $184,000 D. $84,000
The following information is for questions 2 until 10: Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. • Collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible. • The cost of goods sold is 80% of sales. • The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,700. Monthly depreciation is $17,000. Ignore taxes. Statement of Financial Position October 31 Assets: Cash. 2$ 28.000 Accounts receivable (net of allowance for uncollectible accounts). 78.000 Inventory Property, plant and equipment (net of $640.000 accumulated depreciation).. Total assets. 104.000 1.132.000 $1.342.000 Liabilities and Stockholders Equity: Accounts payable $200.000 Common stock 800.000 Retained earnings Total liabilities and stockholders' equity 342.000 $1.342.000 2. Expected cash collections in December are: A. $126,500 B. $230,500 C. $104,000 D. $230,000 3. The cost of December merchandise purchases would be: A. $176,000 B. $208,000 C. $184,000 D. $84,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:NO:.
A. $184,000
B. $196,000
C. $176,000
D. $84,000
5. The excess (deficiency) of cash available over disbursements for December would
A. $12,800
B. $8,600
C. $17,000
D. $4,200
6. The net income (loss) for December would be:
A. $24,300
B. $12,800
C. ($4,200)
D. $7,300
7. The cash balance at the end of December would be:
A. $40,100
B. $28,000
C. $12,100
D. $40,800
8. The accounts receivable balance, net of uncollectible accounts, at the end of December would
be:
A. $89,500
B. $92,000
C. $103,500
D. $196,000
9. Accounts payable at the end of December would be:
A. $84,000
B. $92,000
C. $184,000
D. $176,000
10. Retained earnings at the end of December would be:
A. $342,000
B. $362,600
C. $337,800
D. $338,100
2021.01.02 19:21
Transcribed Image Text:2021.01.02 19:21
The following information is for questions 2 until 10:
Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's
operations follow:
• Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for
January.
• Collections are expected to be 55% in the month of sale, 40% in the month following the sale,
and 5% uncollectible.
• The cost of goods sold is 80% of sales.
• The company purchases 50% of its merchandise in the month prior to the month of sale and
50% in the month of sale. Payment for merchandise is made in the month following the
purchase.
• Other monthly expenses to be paid in cash are $21,700.
Monthly depreciation is $17,000.
Ignore taxes.
Statement of Financial Position
October 31
Assets:
Cash..
$28,000
Accounts receivable (net of allowance for
uncollectible accounts).
78,000
104.000
Inventory
Property, plant and equipment (net of $640,000
accumulated depreciation)...
1.132.000
$1.342.000
Total assets....
Liabilities and Stockholders Equity:
Accounts payable
Common stock
$200.000
800.000
Retained earnings...
Total liabilities and stockholders' equity
342.000
$1.342.000
2. Expected cash collections in December are:
A. $126,500
B. $230,500
C. $104,000
D. $230,000
40%
3. The cost of December merchandise purchases would be:
A. $176,000
B. $208,000
C. $184,000
D. $84,000
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