1. Toscano Company makes all its sales on account. Accounts receivable payment e
ID: 2355979 • Letter: 1
Question
1.
Toscano Company makes all its sales on account. Accounts receivable payment experience is as follows:
Percent paid in the month of sale
25%
Percent paid in the month after the sale
64%
Percent paid in the second month after the sale
5%
Toscano provided information on sales as follows:
May
$140,000
June
$115,000
July
$126,000
August (expected)
$132,000
How much of May's sales are expected to be uncollectible?
A)$8,400
B)$7,200
C)$2,500
D)$0
E)$5,000
5.
Cash budgeting is important to which of the following?
A)manufacturing firms
B)retail stores
C)all of these
D)not-for-profit agencies
E)local government agencies
13.
Which of the following is not an advantage of participative budgeting?
A)It fosters a sense of managerial responsibility.
B)It encourages the introduction of budgetary slack.
C)It encourages a higher level of performance.
D)It fosters a sense of creativity in managers.
E)It encourages greater goal congruence.
14.
Which of the following statements is true?
A)The cost of goods sold budget is prepared before the direct labor and overhead budgets.
B)The cash budget is prepared before the direct materials purchases budget.
C)The production budget is the first budget to be prepared in the master budget.
D)Service firms need not prepare a master budget.
E)The budgeted balance sheet is prepared after the cash budget.
18.
Bright Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months of 2011 are as follows:
Month
Sales
October
10,000
November
14,000
December
13,000
Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Bright Lamp expects to sell the lamps for $25 each. January 2012 sales are projected at 16,000 lamps. How many lamps should be produced in November?
A)13,750 lamps
B)14,000 lamps
C)11,000 lamps
D)10,500 lamps
Hope u can show me the steps. Thank you so much!
Percent paid in the month of sale
25%
Percent paid in the month after the sale
64%
Percent paid in the second month after the sale
5%
Explanation / Answer
1) $140,000 x 6% = $8400 5) (c) All of these 13)(D) It fosters a sense of creativity in managers 14)(C)The production budget is the first budget to be prepared in the master budget. 18)(A)13,750 lamps Units produced = Opening Stock of november(Closing stock of october = 25% November sales) +Purchases - Closing stock of November(25% of December) 14000 = (14000)25% + X - (13000)25% = 3500+X-3250 = X+250 X= 14000-250 = 13750 units
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