5 freighters inc has provided the following extracts from their budget for the first 4307781

5) Freighters Inc. has provided the following extracts from their budget for the first quarter of the forthcoming year:

	Jan	Feb	March
Purchases on account	$280,000	$295,000	$310,000

The vendors allowed terms of payment as follows:

Month of purchase	25%
First month after the purchase	50% of the balance
Second month after the purchase	balance 50%

Calculate the total payment on account for the month of March.

A) $259,625

B) $563,245

C) $325,643

D) $293,125

6) The following details have been extracted from the budget of a merchandising company.

Rent Expense	$8,000 per month
Depreciation Expense	$ 3,500 per month
Insurance Expense	$1,250 per month
Miscellaneous Expense	2% of sales, paid as incurred
Commissions Expense	10% of sales
Salaries Expense	$7,000 per month

Dec	Jan	Feb	March
Sales $45,000	$50,000	$65,000	$80,000

Commission and salaries expenses are paid 50% in the month to which they relate and the balance in the next month.

Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at the beginning of the quarter. Calculate cash payments for the selling and administrative expenses for the first quarter of the next year.

A) $70,400

B) $50,500

C) $75,000

D) $62,750

7) Uncle's Caps Inc. a merchandising company has provided the following budgeted amounts for the next budget period.

Balance of cash at the beginning	$30,000
Cash collections	680,000
Payments for:
Purchase of inventory	350,000
Selling and administrative expenses	70,400
Capital expenditures	89,000

A minimum cash balance of $250,000 is required to be maintained. The company can borrow in increments of $10,000 as and when required. Assume the company can borrow the needed funds at the end of the period. Calculate the ending cash balance for the budget period.

A) $320,300

B) $250,600

C) $300,000

D) $540,230

8) While preparing the budgeted income statement of a merchandising company, the amount of cost of goods sold can be taken from the ________.

A) budgeted balance sheet

B) budgeted cash flow statement

C) inventory, purchases, and COGS budget

D) capital expenditures budget.

9) Uncle's Caps Inc. a merchandising company, wants to prepare the budgeted balance sheet for the next budget period. For this purpose, the amount of ending cash balance can be retrieved from the ________.

A) capital expenditures budget

B) budgeted funds flow statement

C) cash budget

D) sales budget

10) The amount of accumulated depreciation for the budgeted balance sheet can be obtained from ________.

A) cash budget

B) selling and administrative expenses budget and the prior balance sheet

C) cash payments for S&A expenses budget

D) financial budget

11) The final step in the process of creating the master budget is the preparation of the ________.

A) operating budget

B) budgeted balance sheet

C) budgeted cash flow statement

D) cash budget

12) In the cash flow statement, all cash receipts and payments are categorized into Operating activities, Financing activities, and ________.

A) investing activities

B) merchandising activities

C) budgeting activities