Budgeting Mulitple Choice 2 PDF

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19 – 27 DY Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:  Sales are budgeted at P290,000 for November, P310,000 for December, and P210,000 for January.  Collections are expected to be 65% in the month of sale, 33% in the month following the sale, and 2% uncollectible.  The cost of goods sold is 80% of sales.  The company purchases 70% of its merchandise in the month prior to the month of sale and 30% 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 P21,100.  Monthly depreciation is P21,000.Ignore taxes. Statement of Financial Position October 31 Assets: Cash Accounts receivable (net of allowance for uncollectible accounts) Inventory Property, plant and equipment (net of P624,000 accumulated depreciation) Total assets Liabilities and Stockholders’ Equity: Accounts payable Common stock Retained earnings Total liabilities and stockholders’ equity

P

25,000 77,000 162,400 1,026,000 P1,290,400 P 239,000 740,000 311,400 P1,290,400

19. Expected cash collections in December are: A) P310,000 B) P95,700

C) P297,200

D) P201,500

20. The cost of December merchandise purchases would be: A) P248,000 B) P232,000

C) P117,600

D) P192,000

21.December cash disbursements for merchandise purchases would be: A) P192,000 B) P243,200 C) P117,600

D) P248,000

22. The excess (deficiency) of cash available over disbursements for December would be: A) P46,600 B) P19,200 C) P13,700 D) P32,900 23. The net income for December would be: A) P13,700 B) P32,900

C) P40,900

D) P19,900

24. The cash balance at the end of December would be: A) P63,300 B) P25,000

C) P57,900

D) P38,300

25. The accounts receivable balance, net of uncollectible accounts, at the end of December would be: A) P102,300 B) P198,000 C) P83,200 D) P108,500 26. Accounts payable at the end of December would be: A) P192,000 B) P248,000

C) P117,600

D) P74,400

27. Retained earnings at the end of December would be: A) P325,100 B) P311,400

C) P335,200

D) P347,200

28. Norman Medical Center has provided you with the following budget information for July: Cash collections P 918,000 Cash disbursements 1,020,400 July 1 cash balance 32,000 Norman has a policy of maintaining a minimum cash balance of P30,000 and borrows only in P1,000 increments. How much will Norman borrow in July? a. P 70,400 b. P 71,000 c. P100,400 d. P101,000...