Accounting

Acct 2312-

Name __________________________

Answer Sheet

Essay/Problems (20%) - Answer any 4 out of the 7.

41. Avery's Bicycle Shop, a retail store, has an average gross profit ratio of 28 percent. The sales forecast for the next four months follows:

Management's inventory policy is to have ending inventory equal to 1.4 times the cost of sales for the subsequent month, although it is estimated that the cost of inventory at March 31 will be $170,000.

Calculate the purchases budget, in dollars, for the months of April, May, and June.

42. Danzi, Inc., has budgeted sales for the month of July and estimated cost behavior patterns for a number of its expense items listed below. From this information prepare an operating expense budget for the month of July.

43. Remote Center's sales are all made on account. The firm's collection experience has been that 20 percent of a month's sales are collected in the month of sale, 60 percent are collected in the month following the sale, and 18 percent are collected in the second month following the sale. The sales forecast for the months of August through November is:

Calculate the cash collections that would be included in the cash budgets for October and November.

44. The monthly cash budgets for the first quarter of 2009 are shown below ($000 omitted) for XYZ Company. A minimum cash balance of $40,000 is required. A line of credit has been established with ABC's bank at a 7.5% interest rate. Calculate the missing amounts:

45. The standards for one case of Saycheles are:

During the week ended April 15, the following activity took place:

* 14,500 lbs. of raw material were purchased for inventory at a total cost of $81,200;

* 1,800 cases of finished product were produced;