I HAVE TONS OF HOMEWORKS ONLY THESE I\'M STRUGGLING INCORRECT PLEASE HELP ANSWER
ID: 2748861 • Letter: I
Question
I HAVE TONS OF HOMEWORKS ONLY THESE I'M STRUGGLING INCORRECT PLEASE HELP ANSWER ALL I BEG PLEASEEEEEE
1.
The first budget prepared in a master budget is the cash receipts budget.
True
False
2.
What information does the sales budget provide for pro forma financial statements?
Total budgeted sales to be used on the pro forma income statement
The ending balance in accounts payable which appears on the pro forma balance sheet
Cash collections from customers to be used on the pro forma balance sheet
All of these answers are correct.
3.
The cash budget is not the same as the pro forma cash flow statement.
True
False
4.
Interest expense is not included in the selling and administrative budget because a company cannot estimate interest expense until it prepares the cash budget and makes borrowing projections.
True
False
5.
Vector Company seeks input from salespeople regarding the number of units they believe they can sell during the upcoming budget period. This is an example of participative budgeting.
True
False
6.
Which section is not included on the cash budget?
Financing
Investing
Cash payments
Cash receipts
A schedule of cash receipts is often prepared in conjunction with the sales budget.
True
False
8.
Budgeted sales commissions would appear on the:
sales budget and pro forma income statement
selling, general and administrative budget and pro forma income statement
sales budget and pro forma balance sheet
selling, general and administrative budget and pro forma balance sheet
9.
The master budget normally covers:
1-5 years.
5-10 years.
Three months.
1 year.
10.The following budget information is available for the Arch Company for January 2014:
All operating expenses are paid in cash in the month incurred. Compute total budgeted selling and administrative expenses (excluding interest) amount for January 2014.
7.
Explanation / Answer
Answer:
I am trying to give some answers here:
1) The first budget prepared in a master budget is the cash receipts budget. - False
Generally, Sales budget is prepared first in master budget because all the operational budgets are related directly or indirectly with the estimated revenues as represented in a Sales Budget.
2) All of these answers are correct
Sales budget is a very important in order to find out the budgeted sales & all the other budgets are directly or indirectly related with the sales budget like, production budget, Expenses Budget, Cash Collection in Cash Budget. So this is important for all
Total budgeted sales to be used on the pro forma income statement (Directly related to Sales Budget)
The ending balance in accounts payable which appears on the pro forma balance sheet (Indirectly related to to Sales Budget i.e. it is related to Production Budget and Direct Material Cost Budget)
Cash collections from customers to be used on the pro forma balance sheet (Directly related to Credit Sales)
3) The cash budget is not the same as the pro forma cash flow statement.--- TRUE
Cash Budget only consists only inflow and outflow of cash. It is generally used to see that if the business is capable to meet out cash expenses. Proforma Cash Flow Statement is prepared to find out current and projected figure with the help of Profit & Loss Statement and Balance Sheet or proforma balance sheet.
9) The master budget normally covers:---- 1 year
The master budget is generally prepared for 1 fiscal year at the begining of the fiscal year to find out the projected expenses and revenue of business concern for a fiscal year..
10) Computation of total budgeted selling and administrative expenses (excluding interest) amount for January 2014
The following expenses are included in selling and administrative expenses
Administrative Salaries = $100,000 ( directly related to administrative department)
Sales Commission = 5% of Sales = 5% x $860,000 = $43,000 (Sales commission are paid to sales agent for their efforts to sale the product in their area/teritorry, so it is related to selling expenses)
Advertising = $20,000 (it is related to selling expenses because advertisement expenses are incurred to create demand of product in the market)
Rent on Administration Building = $60,000
Misc. Admn Expenses = $10,000
Store Equipment Depreciation = $50,000 (store equipment are used to move finished product for various purpose like to show the product to customer for display. so it is a part of selling & admn expenses)
Total Selling and Administrative Expenses = $283,000
Regarding other answers --- please ask seperate question....i will give you all the answers..
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