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Question
Sweeny Co. is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted:
| April | May | ||
| Sales | $150,000 | $157,500 | |
| Merchandise purchases | 107,000 | 112,400 | |
| Operating expenses: | |||
| Payroll | 13,600 | 14,280 | |
| Advertising | 5,400 | 5,700 | |
| Rent | 1,500 | 1,500 | |
| Depreciation | 7,500 | 7,500 | |
| End of April balances: | |||
| Cash | 40,000 | ||
| Bank loan payable | 16,000 | ||
Additional data:
(1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000.
(2) Purchases are all on credit, with 40% paid in the month of purchase and the balance paid in the following month.
(3) Operating expenses are paid in the month they are incurred.
(4) A minimum cash balance of $40,000 is required at the end of each month.
(5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available.
Prepare the company's cash budget for May. Show the ending loan balance at May 31.
Answer
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Related questions
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Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
3.0373 Assuming all revenue is to be received at the end of each year, what are the net cash flows for this investment if net present value equals ($11,790)?
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Q:
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E. Net present value, payback period, accounting rate of return, and internal rate of return.
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The process of restating future cash flows in terms of their present value is called _____________________.
Q:
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B. A monthly period separated into daily budgets.
C. A quarterly period separated into weekly budgets.
D. An annual period separated into weekly budgets.
E. An annual period separated into quarterly and monthly budgets.
Q:
The most useful budget figures are developed:
A. From the top down.
B. From the bottom up following a participatory process.
C. Solely by the budget committee.
D. By the CEO.
E. After the accounting period has begun.
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Preparing a master budget is usually the responsibility of:
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B. The marketing department.
C. A budget committee.
D. The chief financial officer.
E. Lower level management.
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Part of the cash budget is based on information drawn from the capital expenditures budget.
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The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.
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The ______________________________ shows the budgeted costs for direct materials, direct labor, and overhead based on the budgeted production volume from the production budget.
Q:
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April
May
June
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580
530
600 Ending Raw Materials Inventory
663 lbs. Ending Finished Goods Inventory
174 units Desired ending inventory:
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Finished goods = 20% of next month's sales
Pounds of raw material required for each finished Unit = 5 lbs.
Direct labor hours per unit = 0.5 hrs
Direct labor rate = $12/hour
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Which of the following statements is true regarding absorption costing?
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B. It is not permitted to be used for financial reporting.
C. It is not permitted to be used for tax reporting.
D. It assigns all manufacturing costs to products.
E. It requires only variable costs to be treated as product costs.
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Which of the following is not a product cost?
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B. Indirect manufacturing costs.
C. Direct materials.
D. Manufacturing overhead.
E. Advertising costs.
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