Cost Accounting Final Exam Fall 2017 Mr Rosenbaum Touro Coll

Cost Accounting Final Exam Fall 2017 Mr. Rosenbaum Touro College Multiple Choice Questions (50%) Kind Company is preparing the cash budget for March 20x1. The collection pattern for credit sales has been 60% in the month of sale, 30% in the first month after sale, and the rest in the second month after sales. There are cash sales each month equal to 50% of total sales. The total sales for the first quarter were estimated as follows: 1) $30,000 $20,000 $25,000 What amount would be the projected cash collections for March? January: February: March: A. 12,000 B. 24,000 C. 24,500 D. 25,000 2) Gibor Corp. is preparing the cash budget for December 20xl. The payment pattern for the purchase of merchandise has been 75% in the month of sale, 15% in the first month after sale, and the rest in the second month after sales. The company usually receives a 10% discount on all purchases. Accounts payable on January 1st was $25,000. The total purchase for the third quarter were estimated as follows october: $50,000 November: $75,000 December: $100,000

Solution

Answer 1-C. $24,500 Sales Budget Jan Feb Mar Total Total Sales in $      30,000      20,000      25,000      75,000 Cash Sales - 50%      15,000      10,000      12,500      37,500 Credit Sales - 50%      15,000      10,000      12,500      37,500 Schedule of Expected Cash Collections from Sales Mar Cash Sales - 50%      12,500 Collection from Accounts Receivables Jan Sales - $15,000 X 10%         1,500 Feb Sales - $10,000 X 30%         3,000 Mar Sales - $12,500 X 60%         7,500 Total cash Collections      24,500