67 & 68 practice test inventory is 500 units, the beginning inventory is 300 uni

Question

67 & 68 practice test

inventory is 500 units, the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period is a. 9,500 b. 9,700 c. 10,200 d. 10,500 66. Newark Co. has $296,000 in accounts receivable on January 1, 2006. Budgeted sales for January are $860,000. Newark expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are: a. $812,000 b. $688,000 $984,000 d. $468,000 67. Morris Company pays each of its three sales people a base salary of $200 per month plus a commission of 10 percent of sales. The base salary is paid each month as incurred; the 10 percent commission is paid the month following the month of sale. The total sales for the past four months are as follows September October November December $10,000 $15,000 $20,000 $30,000 The total salary and commission cash disbursements for November add up to a. $1,500 b. $2,600 c. $3,600 d. $2,100

Explanation / Answer

66) Calculate january cash collection :

January cash collection = 296000+(860000*20%+860000*80%*75%) = 984000

So answer is c) $984000

67) Calculate total salary and commission Cash disbursement for november = (200*3+15000*10%) = 2100

So answer is d) $2100

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