Uncle's Caps, a Merchandiser, Has Provided the Following Budgeted Amounts

question 20

Multiple Choice

Uncle's Caps, a merchandiser, has provided the following budgeted amounts for the next budget period. $$\begin{array} { | l | r | } \hline \text { Balance of cash at the beginning } & \$ 30,000 \\\hline \text { Cash collections } & 680,000 \\\hline \text { Payments for: } & \\\hline \text { Purchase of inventory } & 350,000 \\\hline \text { Selling and administrative expenses } & 70,400 \\\hline \text { Capital expenditures } & 89,000 \\\hline\end{array}$$ A minimum cash balance of $250,000 is required to be maintained. The company can borrow in increments of $10,000 as and when required. Assume the company can borrow the needed funds at the end of the period. Calculate the ending cash balance for the budget period.

• A) $320,300
• B) $250,600
• C) $300,000
• D) $540,230

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Definitions:

Process Costing

A costing method used in industries where production is continuous and the products are indistinguishable from each other, allocating costs over the entire production process.

Work in Process

Inventory of items that are in the process of being manufactured but are not yet complete.

Units Transferred

Refers to the movement of goods from one stage of production to another or from the production department to the finished goods inventory.

First-In, First-Out

An inventory valuation method where goods produced or acquired first are sold or disposed of before newer inventory, reflecting the actual flow of goods.