Question #1
List and describe four potential advantages of budgeting and four potential disadvantages of budgeting. As part of your description, you should provide examples of the advantages and disadvantages.
Question #2
The following forecasted sales pertain to Arrow Corporation:
|
Month
|
Sales
|
|
September
|
$160,000
|
|
October
|
200,000
|
|
November
|
120,000
|
|
December
|
80,000
|
Collection pattern: 75 percent in month of sale; 25 percent in month following sale
Accounts Receivable (August 31): $28,000
Finished Goods Inventory (August 31): 30,000
Arrow Corporation has a selling price of $10 per unit and expects to maintain ending inventories equal to 30 percent of the next month's sales. Calculate the budgeted beginning balance in units for finished goods inventory on November 1?
Question #3
The forecasted sales pertain to Skifurn, Inc.:
|
Month
|
Sales
|
|
January
|
$ 900,000
|
|
February
|
1,000,000
|
|
March
|
600,000
|
|
April
|
400,000
|
Collection pattern: 70 percent in month of sale; 30 percent in month following the sale
Accounts Receivable (December 31): $140,000
Finished Goods Inventory (December 31): 160,000
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales.
Calculate the amount of cash that Skifurn expects to collect in February?