1. Sales commissions are paid in cash in the month following the month in which the expense is recognized. All other relevant expense items are to be paid in the month in which they are recognized. Based upon these management assumptions, and your analysis of the costs involved, the amount of cash to be paid for operating (S,G&A) expenses during the January month is expected to be: a. $12,000 b. $25,900 c. $26,800 d. $37,900 e. $38,800
All computational work must be shown for problems 2-4
2. Jess, Inc. projected sales to be $260,000 in June, $270,000 in July and $300,000 in August. The company expects to collect 20% of a month's sales in the month of sale, 60% in the month following the sale, and 18% in the second month following the sale. The remaining amounts are expected to be uncollectible. Cash collections in August would be: a. $60,000 b $254,600 c. $266,200 d. $268,800 e. $277,000
3. Rangler, Inc. has projected sales to be $260,000 in June, $270,000 in July and $300,000 in August. The company expects to collect 30% of a month's sales in the month of sale, 60% in the month following the sale, and 10% in the second month following the sale. The budgeted Accounts Receivable balance on August 31st at close of business would be: a. $96,000 b. $210,000 c. $237,000 d. $264,000 e. $300,000
4. Dexter, Inc. is in the process of preparing a Purchases Budget for the upcoming April-June quarter. The company has forecasted total sales revenue as follows: March $72,000 April $93,000 May $102,000 June $123,000 Cost of goods sold is expected to be 60% of sales. The company would like to have ending inventory each month equal to 10% of the following month's predicted cost of sales. Given these requirements, the total amount of purchases required for April would be: a. $ 5,580 b. $ 55,800 c. $ 56,340 d. $ 61,920 e. $ 93,000