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Question 1: 1. Fofoyaya Corporation budgeted cost of finished goods manufactured was $500,000 for October. Its October 31 finished goods inventory budgeted to be twice the level of its October 1 finished goods inventory. The cost of goods sold budget for October has been set at $450,000. Foroyaya's finished goods inventory at October 31 is budgeted at: 2 Fofoyaya Corporation expects to incur $360,000 in expenses during November (excluding interest and taxes). Of this amount, depreciation is budgeted at $70,000, and expired prepayments are budgeted at $35,000. Fofoyaya's current payables total $60,000 at November 1 and are budgeted to increase to $70,000 by November 30, Payments on current payables budgeted for November total: 4 5 3 Fofoyaya Corporation pays its debt service costs in full cach month October debt service costs are budgeted at $9,000. However, of this amount, only $1,000 represents a reduction principal. The company expects to issue no new debt during the month. What cash disbursement amount will be shown on Fofoyaya's debt service budget? Fofoyaya Corporation's accounts receivable remain outstanding approximately 42 days, whereas its inventory remains in stock approximately 12 days before it is sold. It takes suppliers approximately 7 days to deliver inventory to Fofoyaya once an order is received. Fofoyaya's operating cycle is: As Fofoyaya budgeted output per the flexible budget increases, per-unit fixed costs (increase/decrease): Explain Question II: A. Fofoyaya Corporation is about to start operation on December 1, 2016. The Corporation has asked you as the controller/Treasurer to prepare the budgeted Income statement for the month of December based on the following assumption: 1. December sales are estimated at $300,000.00 of which 30% and 67% will be collected during the month of sales and the following month respectively. The remaining 3% is noted as bad debt. 2. Purchases are estimated at $200,000.00 of which 80% will be paid on the month of purchased and the other 20% will be paid the following month 3. The gross profit margin is estimated to be 40% of Sales 4. The company estimated fixed selling and administrative expenses to be 10% of Sales of which 60% is paid in the month of the expense and 40% the following month. The account does not include any depreciation amount 5. The company debt service is estimated to be $7,000.00 of which $2,500.00 represents interest expense and the remainder is the principle payment. No payment is made on the interest expense during the month of December 6. The company estimated tax rate is 35%. 7. The company estimated depreciation to be $4,000.00 B. What is the total cash payment that Fofoyaya Corporation will make for December 31, 2016? C. What is the total cash receipt that Fofoyaya Corporation will post to their cash account for December

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