CH.23 Orion

Sally Automotive is preparing the budget for the first quarter and estimates that budgeted cash purchases will be $106,000, $98,400, and $103,600 for January, February, and March, respectively. The company also purchases on credit and historically pays 40% of its credit purchases in the month of purchase, 50% in the month following purchase, and 10% in the second month after the purchase. Credit purchases during this time are expected to be $186,000, $174,800, and $202,000 for January, February, and March, respectively. What amount will be reported for Accounts Payable in the March balance sheet? a.) $290,400 b.) $138,680 c.) $123,480 d.) $204,280

138,680 (202,000x.60)+(174,800x.10)

If variable costs are related to direct material or direct labor costs, they are _________ the product cost. a.) included in b.) excluded from

Included in

Barclay Spa borrowed $500,000 to renovate the massage therapy area of the facility. The terms of the loan were 6% annually over 10 years. Where would this obligation appear on the budgeted balance sheet for December 31, 2015? a.)Short-Term Debt b.)Long-Term Debt c.)Accounts Payable d.)Accounts Receivable

Long-Term Debt

Depreciation and Bad Expenses are ___________ items a.)cash b.)non-cash

Non-cash