31. (Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: Sales $10,000 $20,000 $30,000 $30,000 $50,000 S40,000 Wages 1,500 500 400 2,000 2,500 1,500 500 500 500 Purchases for the month of May are expected to be 500 600 500 a) $21,000 b) $15,000 c) $30,000 d) $10,500 Answer. b Difficulty: Medium Learning Objective: Explain how a cash budget is developed. Bloomcode: Application 32. (Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: Sales $10,000 $20,000 $30,000 $30,000 $50,000 $40,000 1,500 2,000 2,500 1,500 32. (Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: May Sales $10,000 $20,000 $30,000 $30,000 $50,000 $40,000 Wages 1,500 2,000 2,500 1,500 Rent 500 500 500 500 Cash disbursements in July for purchases are expected to be: 500 600 a) $43,000 b) $16,000 c) $22,000 d) $21,000 Answer. c Difficulty: Medium Learning Objective: Explain how a cash budget is developed. Bloomcode: Application 33. (Appendix 10A) Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the month of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale Inventory on hand at the end of a month is to be 70% of the next month's budgeted sales. Cost of goods sold is 50% of the selling price. Payment for purchases is made in the month after purchase. All other costs are paid in the month incurred. Budgeted amounts are as follows: Sales $10,000 $20,000 $30,000 $30,000 $50,000 $40,000 Wages 1,500 2,000 1 500