Question

1. Sheridan Company estimates its sales at 160000 units in the first quarter and that sales will increase by 10000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $35. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale

Cash collections for the third quarter are budgeted at

$5166000.

$6237000.

$3591000.

$7182000.

2. A company has budgeted direct materials purchases of $200000 in July and $380000 in August. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During August, the following items were budgeted:

Wages Expense $50000

Purchase of office equipment 62000

Selling and Administrative Expenses 38000

Depreciation Expense 26000

The budgeted cash disbursements for August are

$476000.

$438000.

$502000.

$326000.

Answer 1

answered by: anonymous