Questions
Single choice
The budgeted income statement is:
Options
A.a. the end-product of the financial budgets.
B.b. the end-product of the operating budgets.
C.c. dependent on cash receipts and cash disbursements.
D.d. the starting point of the master budget.
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Step-by-Step Analysis
Consider the question about the budgeted income statement and review what each choice implies.
Option a: 'the end-product of the financial budgets.' This is inaccurate because the budgeted income statement is derived from operating budgets, not financial budgets alone. Financial budgets (like th......Login to view full explanationLog in for full answers
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Abbott Inc has the following information for the year ending June 2019 (year 1): Revenues (250,000 units) $3,730,000 Manufacturing Costs Materials $665,000 Variable Cash Costs 904,000 Fixed Cash costs 360,000 Depreciation (fixed) 445,000 Marketing & administrative Costs: Marketing (variable) 475,000 Marketing depreciation 113,000 Administrative (fixed) 450,550 Administrative depreciation 42,000 Total Costs $3,454,550 Operating profits $275,450 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 13%, and selling prices are expected to increase by 4%. Material costs per unit are expected to increase by 8%. Other unit variable manufacturing costs are expected to increase by 10% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6%. Variable marketing costs per unit will remain constant. Administrative costs (other than depreciation) are expected to increase by 12%. Assume there are no inventories. Abbott operates on a cash basis. A budgeted income statement for June 2020 will show an approximate income (loss) of:
Question textPrepare a budgeted income statement for Toys 4 You for July 2022 using the following information: – Cash sales for July are expected to be $16,500 – Toys for 4 expect to Credit sales to be twice the amount of cash sales. – All toys are marked up by 150% of cost price. – Employees work 4.2 weeks during July and the weekly wage expense is $1,200. – Monthly costs include: Online advertising is $250 per month, Security and cleaning costs $280 per month, Insurance which costs $12,000 for the full year, Telephone and Data phone plans of $240 per month and Depreciation of shop fittings at 15% per annum (cost $10,000), straight-line method. – Owner drawings are $3,000 each month – Creditors are paid in the month after purchase gaining a 5% discount. Creditors balance at 1 July is $6,900. – To encourage early receipt from credit customers a 2% discount is offered on amounts paid within 20 days. It is expected customers with an accumulated balance of $15,000 will pay in credit terms during July 2022. (Do not include $ , or decimal places in your amounts)Toys 4 You Budgeted Income Statement for the month ending 31 July 2022 [table] Cash sales | Answer 1 Question 1 | Credit Sales | Answer 2 Question 1 | Answer 3 Question 1 Less Cost of Sales | | Answer 4 Question 1 Answer 5 Question 1 Gross ProfitNet Profit | | Answer 6 Question 1 Other Income | | Answer 7 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | | Answer 8 Question 1 Less Other Expenses (Select correct expenses in order per the drop down list) | | Answer 9 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 10 Question 1 | Answer 11 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 12 Question 1 | Answer 13 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 14 Question 1 | Answer 15 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 16 Question 1 | Answer 17 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 18 Question 1 | Answer 19 Question 1 AdvertisingExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 20 Question 1 | Answer 21 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 22 Question 1 | Answer 23 Question 1 Answer 24 Question 1 Gross ProfitNet Profit | | Answer 25 Question 1 [/table]
Question textPrepare a budgeted income statement for Toys 4 You for July 2022 using the following information: – Cash sales for July are expected to be $16,500 – Toys for 4 expect to Credit sales to be twice the amount of cash sales. – All toys are marked up by 150% of cost price. – Employees work 4.2 weeks during July and the weekly wage expense is $1,200. – Monthly costs include: Online advertising is $250 per month, Security and cleaning costs $280 per month, Insurance which costs $12,000 for the full year, Telephone and Data phone plans of $240 per month and Depreciation of shop fittings at 15% per annum (cost $10,000), straight-line method. – Owner drawings are $3,000 each month – Creditors are paid in the month after purchase gaining a 5% discount. Creditors balance at 1 July is $6,900. – To encourage early receipt from credit customers a 2% discount is offered on amounts paid within 20 days. It is expected customers with an accumulated balance of $15,000 will pay in credit terms during July 2022. (Do not include $ , or decimal places in your amounts)Toys 4 You Budgeted Income Statement for the month ending 31 July 2022 [table] Cash sales | Answer 1 Question 1 | Credit Sales | Answer 2 Question 1 | Answer 3 Question 1 Less Cost of Sales | | Answer 4 Question 1 Answer 5 Question 1 Gross ProfitNet Profit | | Answer 6 Question 1 Other Income | | Answer 7 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | | Answer 8 Question 1 Less Other Expenses (Select correct expenses in order per the drop down list) | | Answer 9 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 10 Question 1 | Answer 11 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 12 Question 1 | Answer 13 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 14 Question 1 | Answer 15 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 16 Question 1 | Answer 17 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 18 Question 1 | Answer 19 Question 1 AdvertisingExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 20 Question 1 | Answer 21 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 22 Question 1 | Answer 23 Question 1 Answer 24 Question 1 Gross ProfitNet Profit | | Answer 25 Question 1 [/table]
Question textPrepare a budgeted income statement for Toys 4 You for July 2022 using the following information: – Cash sales for July are expected to be $16,500 – Toys for 4 expect to Credit sales to be twice the amount of cash sales. – All toys are marked up by 150% of cost price. – Employees work 4.2 weeks during July and the weekly wage expense is $1,200. – Monthly costs include: Online advertising is $250 per month, Security and cleaning costs $280 per month, Insurance which costs $12,000 for the full year, Telephone and Data phone plans of $240 per month and Depreciation of shop fittings at 15% per annum (cost $10,000), straight-line method. – Owner drawings are $3,000 each month – Creditors are paid in the month after purchase gaining a 5% discount. Creditors balance at 1 July is $6,900. – To encourage early receipt from credit customers a 2% discount is offered on amounts paid within 20 days. It is expected customers with an accumulated balance of $15,000 will pay in credit terms during July 2022. (Do not include $ , or decimal places in your amounts)Toys 4 You Budgeted Income Statement for the month ending 31 July 2022 [table] Cash sales | Answer 1 Question 1 | Credit Sales | Answer 2 Question 1 | Answer 3 Question 1 Less Cost of Sales | | Answer 4 Question 1 Answer 5 Question 1 Gross ProfitNet Profit | | Answer 6 Question 1 Other Income | | Answer 7 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | | Answer 8 Question 1 Less Other Expenses (Select correct expenses in order per the drop down list) | | Answer 9 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 10 Question 1 | Answer 11 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 12 Question 1 | Answer 13 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 14 Question 1 | Answer 15 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 16 Question 1 | Answer 17 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 18 Question 1 | Answer 19 Question 1 AdvertisingExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 20 Question 1 | Answer 21 Question 1 Advertising ExpenseDiscount ExpenseDiscount RevenueDepreciation ExpenseDrawingsInsurance ExpenseSecurity and CleaningTelephone ExpensesWages | Answer 22 Question 1 | Answer 23 Question 1 Answer 24 Question 1 Gross ProfitNet Profit | | Answer 25 Question 1 [/table]
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