budget of cash disbursement for March, the total cash disbursement would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Maroon Company provided the following data on the date of
revaluation:
Building, at original cost 5,000,000
Building, at fair value 6,000,000
Accumulated depreciation - cost 40-year life and 10 years expired 1,250,000
Question for Maroon Company:
HOW MUCH IS THE BLANCE OF REVALUATION SURPLUS AFTER THE SALE?
Question for Noypi Store:
Follow the requirement. Choose the answer from the choices with solution.
Question for Nes Lee,
What is the ending cash balance of September? (Show solution)
a. 12,005
b. 17,600
c. 39,205
d. 7,600
Transcribed Image Text:Nes Lee, controller for Mactan Retailers, has assembled the following data to assist in
the preparation of a cash budget for the third quarter of 2021:
Sales- Mdy
P100,000; JUne-P120,000; July-P90.000; August- P100,000:
September P135,000; October-P?10.000.
Each month, 30% of sales gre for cash and 70% are on credit. The collection
pattern for credit sales is 20% in the month of sale, 50% in the following month.
and 30% in the second month following the sale.
Each month, the ending inventory exactly equals 50% of the cost of next month's
sales. The markup on goods is 25% of cost.
Inventory purchases are paid for in the month following the purchase.
Monthly expenses are as follows: Salaries and wages - P10,000; Depreciation-
P4,000; Utilities - P1,000; Other – P1,700.
Property taxes of P15,000 are due and payable on July 15,2021.
Advertising fees of P6,000 must be paid on August 20,2021.
A lease on a new storage facility is scheduled to begin on September 2, 2021.
Monthly payments are P5,000.
The company has a policy to maintain a minimum cash balance of P10,000. If
necessary, it will borrow to meet its short term needs. All borrowing is done at the
end of the month. All payments on principal and interest are made at the end of
a month. The annual interest rate is 9%. The company must borrow in multiples of
P1,000.
The balance sheet as of June 30, 2021 is as follows:
Cash
Accounts Receivable
P13,550
88.200
36.000
Inventory
Plant and Equipment, net
Accounts Payable
Ordinary Share Capital
Retained Earnings
425,000
P84,000
210,000
268.750
Transcribed Image Text:merchandise inventory on hand at the end of each month be equal to 50% of the
Expected sales for the first four months as follows: January-P10.000: February-
budget preparation, assume the company's cost of good sold is 60% of sales.
assets were P16,000 in cash and P3,500 in merchandise inventory. For purpose of
9. Noypi Store, a retailer, started operations on January 1.On that date. the only
from accounts receivable collections in May.
payments in April for purchases in April - 75%. What is the estimated cash
Estimated payments in April for purchases prior to March - P20.000: Esfimated
April - P450,000; Estimated payments in April for purchases in March- P75.000:
- P90.000: Estimated purchases for April - P440.000: Estimated cost of good sold in
8. Gillan Co. is preparing its cash budget for the month of April The following
information is available conceming its inventories: Inventories at beginning of Apri
in May-P7.000. What are the estimated cash receiph
prior to Apr-P1200: Estimated
sales-P8.000: Esfimated providon foer bod
b. P150,000
a. P157,000
c. P149.000
d. PI42DO
disbursement for inventories in April?
a. P432,500
OP425.000
c. P405.000
d. P401.250
- P25,000. The company desires that the
P24,000; March -P16,000; April
next.month's merchandise sales (stated af cost). All purchases of merchaneise
inventory must be paid in the month of purchase. Sixty percent of oll celee se
cash; the balance will be on credit. Seventy-five percent of the credit sales should
be collected in the month following the sale, with the balance collected in the
following month. Variable operating expense should be 10% of sales and fxed
expense (depreciation) should be P3,000 per month. Cash payments for varigble
operating expense are made during the month the expenses are incurred, In a
budget of cash disbursement for March, the total cash disbursement would be:
a. P16,900
c. P13,900
d. P11,200
b. P22,300
10. Interior Industries sales budget shows quarterly sales for the nextyear as follows:
First Quarter- 10,000 units; Second Quarter-8,000 units; Third Quarter-12,000 units;
Fourth Quarter- 14,000 units. Company policy is to have a finished goods inventory
at the end of each quarter equal to 20% of the next quarter's sales. Budgeted
production for the second quarter should be:
a. 8,400 units
d. 7,200 units
c. 8,000 units
7.
b. 8,800 units
11:Corona Inc., a trading firm, has budgeted its activity for December according to
the following information: (a) Sales at P550.000, all for cash (b) Merchandise
Inventory on November 30 was P300,000 (c) Budgeter
December is P35,000 (d) The cash balance at December
and Admin expenses are budgeted at P60,000 for
cash. (f) The planned merchandise inventory on
ciation for
(el
185
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