No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

OPERATIONS AND FINANCIAL BUDGETING

BUDGETING – the process of developing a formal written statement of the management plans for the
future, expressed in financial terms.

BUDGETS – a formal plan expressed in financial terms, which documents the allocation of funds across
the different departments of the company.

PURPOSE OF BUDGETING
1. Planning
2. Facilitate communication
3. Encourage coordination of all departments
4. Provide incentives
5. Control of operations
6. Performance evaluations
7. Satisfy legal and contractual requirements

ESSENTIAL ATTRIBUTES OF AN EFFECTIVE BUDGETING PROCESS

1. Predictive ability
2. Better communication
3. Reliable and timely information
4. Understandability of information
5. Support at all levels of the organization

LIMITATIONS OF BUDGETING
1. Only estimates not statements of facts
2. No substitute for sound management practices
3. Regular amendment is necessary
4. Does not guarantee success
5. People‟s behavior may undermine the value of the process

BUDGETARY PROCESS
1. Setting the objectives
2. Analyzing the available resources of company
3. Negotiating to estimate budget components
4. Coordinating and reviewing budget components
5. Obtaining the final approval
6. Distribution of the approved budget
TYPES OF BUDGETS

As to Scope

Master Budget – represents the overall plan of the organization for the forthcoming fiscal year. It consists
of all the individual budgets for each of the segment of the organization aggregated or consolidated into
one overall budget for the entire firm.

Operations Budget - budget prepare for activities affecting the company‟s revenue and expenses.

Financial Budget – the budget which examines the planned level of the assets, liabilities and equity of
the company.

Capital Budget – Involves long term projects for fixed assets acquisition
As to Flexibility

Fixed (Static) Budget – based on only one level of activity or production. It is used when a company is
relatively stable.

Flexible (Variable, Dynamic) Budget – a series of budgets prepared for various levels of activity. It
allows variability in the business and for unexpected changes

As to the Basis of the Budget

Continuous (Rolling) Budget – one that is revised on a regular (continuous) basis; typically, the budget
is extended for another month or quarter in accordance with new data as the current month or quarter
ends.

Zero-base Budgeting – a budget and planning process in which each manager must justify a
department‟s entire budget from a base of zero every period; all expenditures must be justified regardless
of the variance from the previous periods; the objective is to encourage periodic re-examination of all
costs in the hope that some can be reduced or eliminated.

Kaizen Budgeting – incorporates expectations for continuous improvement into budgetary estimates.

As to the Activities or Value Chain

Life-cycle Budget – estimates a product‟s revenues and expenses over its entire life cycle in the value
chain.

Activity-based Budgeting – applies activity-based costing principles to budgeting.

PROBLEM 1
Sadness, sales manager of Loob-labas Incorporated, prepared the following sales schedule for the next 5
months of 2024:

July 1,000 units

August 1,100 units
September 1,300 units
October 1,200 units
November 1,400 units

In preparation for the production schedule for the third quarter, the company plans to maintain ending
inventory equal to 80% of the next month‟s sales. Expected production cost per unit is P5.00. Finished
goods inventory at June 30, 2024 consists of 800 units, which amounted to P4,320. The company wants
to maintain a profit of 20% above production cost.

REQUIRED: Prepare cost and quantity schedules for the following:

1. Budgeted sales for the August
2. Budgeted production for the September
3. Budgeted production for the third quarter

PROBLEM 2
The following are independent scenarios related to the preparation of raw materials budget:

 If there were 150,000 pounds of raw material on hand on January 1, 300,000 pounds are desired for
inventory at December 31, and 900,000 pounds are required for annual production, how many
pounds of raw material should be purchased during the year?

 Joy Company manufactures a single product. It keeps its inventory of finished goods at 80% the
current budgeted sales. It also keeps its inventory of raw materials at 60% of the coming month‟s
budgeted production. Each unit of product requires two pounds of materials. The production budget
is, in units: May, 1,000; June, 1,200; July, 1,300; august, 1,600. Raw material purchases in June
would be

 Hockey Company is budgeting sales of 150,000 units of its only product for the coming year.
Production of one unit of product requires three pounds of Material “Fear” and 2 pounds of Material
“Sad”. Inventory units at the beginning of the year are:

Actual, Jan. 1 Budgeted, Dec 31

Finished goods 30,000 25,000
Fear 40,000 30,000
Sad 44,000 48,000

Required:
1. How many pounds of Fear is Hockey planning to buy during the coming year?
2. How many pounds of Sad is Hockey planning to buy during the coming year?
PROBLEM 3
The following are independent scenarios related to the preparation of labor budget:

 OA Incorporated, a leading manufacturer and distributor of soy sauce in Manila City, has the following
sales forecast for the first five months of 2024:

January 1,200,000 gallons

February 1,500,000 gallons
March 1,800,000 gallons
April 1,400,000 gallons
May 1,300,000 gallons

It takes one hour to create 1,000 gallons of soy sauce. Direct labor costs P80 per hour. The company
plans to maintain ending finished inventory equal to 30% of the next month‟s sales while raw
materials inventory equal to 60% of the current month‟s production. Finished goods inventory and raw
materials inventory counted in the warehouse on December 31, 2023 is 400,000 units and 800,000
units, respectively. Compute for the budgeted direct labor costs for the first quarter of 2024.

 Ennui, Inc. uses flexible budgeting for cost control. During the month of August, Ennui, Inc. produced
14,500 units of finished goods with indirect labor costs of P25,375. Its annual master budget reflects
an indirect labor costs, a variable cost, of P360,000 based on an annual production of 200,000 units.
In the preparation of performance analysis for the month of August, how much flexible budget should
be allowed for indirect labor costs?

PROBLEM 4
The following are independent scenarios related to the preparation of labor budget:

 Envy Corporation has forecast the following sales for the first seven months of the year:

January P60,000 May P60,000

February 80,000 June 100,000
March 90,000 July 110,000
April 120,000

Monthly material purchases are set equal to 40 percent of forecasted sales for the next month. Of the
total material costs, 30 percent are paid in the month of purchase and 70 percent in the following
month. Labor costs will run P30,000 per month, and fixed overhead is P15,000 per month, including
depreciation charges of P5,000. Interest payments on the debt will be P10,000 for both March and
June. Finally, Envy‟s sales force will receive a 2 percent commission on total sales for the first six
months of the year, to be paid on June 30.

Required:
1. Payment to raw materials on June
2. Total cash disbursement for the month of June
3. Total cash disbursement for the second quarter of the year
 This Ghast Company, a merchandising firm, is preparing its master budget and has gathered the
following data to help budget cash disbursements:

Cost of goods sold P840,000

Desired decrease in inventories 35,000
Desired decrease in Accounts Payable 75,000

All of the accounts payables are for inventory purchases and all inventory items are purchased on
account. What are the estimated cash disbursements for inventories for the budget period?

PROBLEM 5
Emba Raz Company has the following historical pattern on its credit sales.

60 percent collected in month of sale

20 percent collected in the first month after sale
12 percent collected in the second month after sale
5 percent collected in the third month after sale
3 percent uncollectible

The sales on open account have been budgeted for the first six months of 2024 are shown below:

January P120,000
February 140,000
March 160,000
April 180,000
May 200,000
June 170,000

Accounts receivable balance as at December 31, 2023 amounted to P76,000 with the details as follows:

October 2023 sale 16,000

November 2023 sale 40,000
December 2023 sale 20,000
76,000

REQUIRED: Prepare schedules for the following:

1. Collections for the second month of the first quarter
2. Collections from sale during the second month of the first quarter
3. Collections for the first month of the second quarter of 2023
MULTIPLE CHOICE: Select the best answer from the choices provided. Sources: AICPA/RPCPA/CMA
and Various Test banks

1. Using the concept of „expected value” in sales forecasting means that the sales forecast to be used is
a. developed using the indicator method
b. the sum of the sales expected by individual managers
c. based on expected selling prices of the products
d. based on probabilities

2. Several sales forecasts are available from different sources and the managers have good ideas about
their likelihoods. This situation call for the use of
a. the expected value concept
b. indicator methods
c. historical analysis
d. a scatter diagram

3. Recognition of the many uncertainties in budgeting is exemplified by companies normally

a. forecasting sales
b. establishing minimum required cash balances
c. forecasting only fixed costs
d. omitting expected dividend payments from budgeted disbursements

4. Which of the following statements is True?

a. Under zero-based budgeting, a manager is required to start at zero budget levels each period, as
if the programs involved were being initiated for the first time.
b. The primary purpose of the cash budget is to show the expected cash balance at the end of the
budget period.
c. Budget data are generally prepared by top management and distributed downward in an
organization.
d. The budget committee is responsible for preparing detailed budget figures in an organization.

5. Budgets are a necessary component of financial decision making because they provide a(n)
a. Efficient allocation of resources
b. Means to use all the firm‟s resources
c. Means to check managerial discretion
d. Automatic corrective mechanism for errors

6. In an organization that plans by using comprehensive budgeting, the master budget is

a. The booklet containing budget guidelines, policies and forms to use in the budgeting process
b. The current budget updated for operations for part of the current year
c. A compilation of all the separate operational and financial budget schedules of the organization
d. A budget for a non-profit entity after it is approved by the appropriate authoritative body

7. The budgeting process should be one that motivates managers and employees to work toward
organizational goals. Which one of the following is LEAST likely to motivate managers?
a. Participation by subordinates in the budgetary process
b. Use of management by exception
c. Holding subordinates accountable for the items they control
d. Having top management set budget levels
8. Which of the following is not a potential problem with participative budgeting?
a. setting standards that are either too high or too low
b. padding the budget
c. build slack into the budget
d. all of the above are potential problems

9. The ideal financial planning process would be

a. top-down planning.
b. bottom-up planning.
c. a combination of top-down and bottom-up planning.
d. None of the above

10. In estimating the sales volume for a master budget, which of the following techniques may be used to
improve the projections?
a. Brainstorming.
b. Statistical analysis.
c. Estimating from previous sales volume.
d. All of these are useful.

11. Comparing actual results with a budget based on achieved (actual) volume is possible with the use of
a
a. Monthly budget
b. Rolling budget
c. Master budget
d. Flexible budget

12. Which one of the following budgeting methodologies would be most appropriate for a firm facing a
significant level of uncertainty in unit sales volumes net year?
a. Static budgeting
b. Top-down budgeting
c. Flexible budgeting
d. Life-cycle budgeting

13. “Kaizen” budgeting refers to the budgeting process where

a. A products revenues and expenses are estimated over its entire life cycle (i.e., from R&D phase
to customer support phase)
b. The budget is based on many levels of activity so that the budget may be adjusted based on
actual activity
c. The budget is based on only one level of activity
d. The budget is based not on the existing system, but on changes or improvements that are to be
made

14. A company that uses zero-based budgeting has

a. An expense budget of zero
b. Zero as the starting point of budgeting the coming year‟s expenses
c. A zero variance between budgeted and actual performance
d. An assumed sales level of zero

15. A plan expressed in financial terms, on how to acquire and use the resources of an entity?
a. Production report
b. Management report
c. Budget
d. Performance report
16. It is the group of people which usually composed of the sales manager, production manager, chief
engineer, treasurer, and controller involved in the budgetary process
a. Audit committee
b. Executive committee
c. Budget committee
d. Risk Management committee

17. All the following represents a use of allowance or budgetary slack in the budget, except
a. Allow flexibility for unexpected circumstances
b. Project actual expenses
c. Use the budget to control subordinate performance
d. Increase the probability of achieving the budgeted performance

18. Which of the following planning approaches will promote better management support or acceptance
of the budget?
a. Top-down approach
b. Bottom-up approach
c. Zero-based approach
d. Accounting approach

19. Which of the following planning approaches is commonly used in long range planning and is
centralized to top management?
a. Top-down approach
b. Bottom-up approach
c. Zero-based approach
d. Accounting approach

20. The budget that describes the long-term position, goals, and objectives of an entity within its
environment is the
a. Capital expenditure budget
b. Operation budget
c. Strategic budget
d. Bracket budget

21. Which of the following statement/s is/are false regarding zero-based budgeting?

Statement 1: All activities in the company are organized based on packages or break-up units

Statement 2: All costs have to be justified every budgeting period

Statement 3: The process is not time consuming since justification of costs can be done as a
routine matter.

a. Statement 1
b. Statement 2
c. Statement 3
d. All statements are true

22. Rolling budget is

a. Budget is one that is revised on a regular basis. Typically, a company extends such a budget for
another month or quarter in accordance with new data as the current month or quarter ends.
b. Presents planned activities for a period but do not present a firm commitment.
c. All activities in the company are organized based on packages or break-up units
d. The budget which is used to identify revenues and expenses on the basis of the individual who
has the control over its incurrence
23. The following budgets are normally prepared under which order?
1. Sales budget
2. Cash budget
3. Inventory budget
4. Production budget
5. Purchase budget

a. 1, 4, 3, 5, 2
b. 1, 3, 4, 5, 2
c. 2, 1, 4, 3, 5
d. 1, 5, 3, 4, 2

24. The foundation of the operations budget is the

a. Sales forecast
b. Cost and expense budget
c. Cash budget
d. Production plan

25. Which of the following budgets is usually the most difficult to prepare?
a. Production budget
b. Expense budget
c. Manufacturing overhead budget
d. Sales budget

26. This budget facilitates better cost control such as the comparison of the budgeted and actual
performance for a given period
a. Fixed budget
b. Zero-based budget
c. Continuous budget
d. Flexible budget

27. All of the following represents a sign of budget weakness, except?

a. Significant unfavorable variances are not investigated and corrected.
b. Budget preparers do not keep current
c. Use of budgetary slack
d. The budget is prepared using different methods each years

28. The following are the advantages of budgets, except

a. Links objectives and resources
b. Establishes guidelines in the form of a road map to proceed in the right direction
c. Encourages delegation of responsibility and enables managers to focus more on the specifics of
their plans and how realistic the plans are, and how such plans may be effectively achieved
d. A budget may reward managers who set modest goals and penalize those who set ambitious
goals that are missed.

29. The following are the disadvantages of budgets, except?

a. There is judgment and subjectivity in the budgeting process.
b. Managers may consider that budgets redirect their flexibility to adjust to changing conditions.
c. A budget may reward managers who set modest goals and penalize those who set ambitious
goals that are missed.
d. Aids coordination between departments to attain efficiency and productivity.
30. Which one of the following statements regarding the difference between a flexible budget and a static
budget is true?
a. Flexible budget is better used for a relatively stable company than static budget
b. Static budget allows flexibility for varying circumstances than the flexible budget
c. Flexible budget treats all costs as variable costs unlike a static budget which includes only fixed
costs
d. A flexible budget provides cost allowances for different levels of activity whereas a static budget
provides costs for one level of activity.

31. The procedure for setting profit objectives in which management specifies a given rate of return that it
seeks to realize in the long run by means of planning toward that end is the
a. priori method
b. pragmatic method
c. theoretical method
d. ad hoc method

32. Budgeting process in which information flows top down and bottom up is referred to as:
a. Continuous budgeting
b. Perpetual budgeting
c. Participative budgeting
d. Joint budgeting

33. When management seeks to achieve personal departmental objectives that may work to the
detriment of the entire company, the manager is experiencing:
a. budgetary slack
b. padding
c. goal conflict
d. cushions

34. Budgets need to be fair and attainable for employees to consider the budget important in their normal
daily activities. Which of the following is not considered a human behavior problem?
a. Allowing employees, the opportunity to be a part of the budget process.
b. Setting goals among managers that conflict with one another.
c. Setting goals too tightly making it difficult to meet performance expectation.
d. Allowing goals to be so low that employees develop a “spend it or lose it” attitude.

35. Which of the following is included in a firm‟s financial budget?

a. Cash budget
b. Sales budget
c. Capital budget
d. Both A and B

36. The cash budget should help to ensure

a. That enough cash is on hand at all times to satisfy maximum cash requirements
b. That cash dividends can be paid every quarter
c. That sufficient cash is available to pay salaries, even if it means borrowing the money
d. Sufficient liquidity without an excess amount of idle cash
37. Jlyn Company is preparing budgets for the year ending December 31, 2022. The sales manager
expects sales for the succeeding quarters as follows:

First quarter 5,000 units

Second quarter 5,500 units
Third quarter 5,800 units
Fourth quarter* 8,200 units
First Quarter – 2023 5,200 units
Second Quarter – 2023 5,400 units
*peak season

The sales price per unit is P100.00 per unit

Sales Revenue are expected to be collected as follows

70% at the quarter when sales are made
30% at the quarter following

How much is the total cash receipts from sales for the third quarter of the year?
a. P350,000
b. P535,000
c. P571,000
d. P748,000

38. Bondat Co. has projected sales to be P1,200,000 in January, P1,500,000 in February, and
P1,600,000 in March. Bondat wants to have 50% of next month‟s sales needs on hand at the end of
a month. If Bondat has an average gross profit of 40%, what are the February purchases?
a. P620,000
b. P856,000
c. P930,000
d. P1,550,000

39. Taba Company budgeted purchases of P500,000. Cost of sales was P600,000 and the desired
ending inventory was P210,000. The beginning inventory was
a. P100,000
b. P210,000
c. P160,000
d. P310,000

40. Piggy Company has a collection schedule of 60% during the month of sales, 15% the following
month, and 15% subsequently. The total credit sales in the current month of February and March
were P150,000 and P160,000, respectively, and total collections in March were P127,500. What were
the credit sales in January?
a. P180,000
b. P90,000
c. P60,000
d. P64,000
41. Each unit of finished product uses 6 kilograms of raw materials. The production and inventory
budgets for July 2024 are as follows:

Beginning Inventory:
Finished goods 30,000 units
Raw materials 42,000 kg.

Budgeted unit sales 36,000 units

Planned ending inventory

Finished goods 22,800 units
Raw materials 48,800 kg.

During the production process, it is usually found that 10% of production units are scrapped as
defective and this loss occurs after the raw materials have been placed in process. How many
kilograms of raw materials should be purchased in July?
a. 179,600
b. 192,000
c. 196,880
d. 198,800

42. Samgyup Company expects its June sales to be P600,000, which is 25% higher than its May sales.
Purchases were P400,000 in May and are expected to be P480,000 in June. All sales are on credit
and are collected as follows: 80% in the month of the sale and 20% in the following month. All
payments in the month of sales are given 2% discount. Sixty-percent of purchases are paid in the
month of purchase to take advantage of purchase term of 1/10, n/40. The remaining amount is paid in
the following month. The beginning cash balance on June 1 is P40,000. The ending cash balance on
June 30 would be:
a. P128,320
b. P161,280
c. P146,000
d. P170,880

43. Budang company, a merchandising firm, is preparing its master and has gathered the following data
to help budget cash disbursements:

Budgeted data:
Cost of inventories to be sold P680,000
Desired decrease in inventories 50,000
Desired decrease in accounts payable 130,000

All of the accounts payables are for inventory purchases and all inventories are purchased on
account. What are the estimated cash disbursements for inventories for the budget period?
a. P600,000
b. P500,000
c. P550,000
d. P760,000
44. The Production Manager of Ship Co. is currently preparing the manufacturing budget for the coming
year 2022. Details of the estimated production in units are as follows:

First quarter 5,150 units

Second quarter 5,530 units
Third quarter 6,040 units
Fourth quarter 7,900 units
First quarter – 2023 5,220 units

Current budgeting policy estimates the following ending inventories that would satisfy the volume
requirements of the upcoming year:

Finished Goods: 10% of the following quarter‟s sales

Raw Materials: 20% of the following quarter‟s volume requirements

Furthermore, the company‟s financial statements as of December 31, 2021 show the following ending
balances:

Finished goods 400 units 17,000

Raw materials 2,000 units 16,000
Total 33,000

For simplicity, any work in process is considered negligible. The company follows a 2:1 ratio between
its raw materials and finished goods inventory, respectively. How many units of raw materials must
be purchased during the first half of 2022?
a. 10,512 units
b. 21,767 units
c. 21,776 units
d. 27,552 units

(Use the following information for numbers 33 to 35)

Budang Incorporated manufactures and sells home and office furniture. Estimated sales for the next four
months are:

September P250,000
October 200,000
November 300,000
December 450,000

Sales for August were P200,000. All sales are on account. Budang Inc. estimates that 40% of the
accounts receivable are collected in the month of sale with the remaining 60% collected the following
month. The units sell for P50 each. The cash balance for September 1 is P100,000.

Generally, 55% of purchases are due and payable in the month of purchase with the remainder due the
following month. Purchase cost per unit is P18. The company maintains an end-of-the-month inventory of
1,000 units plus 10% of next month‟s unit sales.

45. Cash receipts during October?

a. 220,000
b. 200,000
c. 230,000
d. 240,000
46. Cash disbursement during October from September purchases?
a. 48,510
b. 81,270
c. 39,690
d. 41,580

47. Supposing all cash transactions during the last quarter pertain to sales and purchases only, how
much is the cash balance as of November 30?
a. 570,030
b. 530,620
c. 430,620
d. 670,030

Use the following information for the next items

Egla Corporation, a cement manufacturer, has been in operations since 2019. It has the newest and
largest integrated cement facility in the country which enabled it to produce 100 million metric tonnes
(MT) of cement annually. Its sales had constantly increase for the last 3 years due to its low cement
prices for every 40 kg-bag. It has two main products: Type 1 and Type 1P. Type 1, which has a higher
concentration of limestone and much stronger than Type 1P, are being sold directly to construction
companies for use in the construction of high-rise building. On the other hand, Type 1P are being sold to
wholesalers and retailers for the construction of households.

In the past years, the Company had been using a traditional costing system which uses the number of
bags in allocating overhead. However, review of cost structure across the products showed that such may
not be appropriate anymore. Esy Barco, the vice president for productions, suggested for the
implementation of Activity-based costing system which was supported by the president, Shantee Paniel,
and approved by the board of directors.

It was later determined that the Company has four relevant activities: Packaging, Order Processing,
Machine Processing and Production inspection. Data relevant to these activities and the related cost
drivers follow:

Activity Activity Base

Packaging 37,500,000 7,500 batches
Order Processing 21,250,000 5,000 orders
Machine Processing 3,000,000 3,187,500 machine hours
In process inspections 63,750,000 31,875,000 bags
P125,500,000

Additional information is provided as follows:

● An order for 4,250 bags of Type 1P cement has the following job order information:

Direct material per bag P5.50

Direct labor cost per hour 9.00
Direct labor hours per bag 0.20
Machine hours per bag 0.10
 ● Sales forecast for Type 1P cement in bags for the last quarter of 2021:

October 4,250,000
November 5,312,500
December 5,100,000

● The company plans to maintain ending finished goods inventory equal to 50% of the next month‟s
sales and applies Just-In-Time inventory policy for its raw materials

● The Company wanted to minimize its stock of finished goods inventory in the warehouse on
December 30, 2022 at 1,500,000 bags only.

48. How much are the total materials purchased for Type 1P for the month of December?
a. 29,218,750
b. 28,634,375
c. 26,296,875
d. 22,275,000

49. How much is the forecasted direct labor costs for Type 1P for the month of November?
a. 7,650,000
b. 8,606,250
c. 9,371,250
d. 7,290,000

50. How much is the forecasted overhead costs for Type 1P for the month of October under ABC?
a. 21,780,000
b. 17,295,882
c. 20,418,750
d. 22,233,750

51. If the price of each bag of Type 1P cement is P10, how much is the contribution margin for the month
of November if 40% of the total overhead applied to the production is fixed?
a. P585,000
b. P731,250
c. P702,000
d. P2,018,250

52. How much is the estimated carrying amount for inventory for external reporting purposes, if the
company‟s policy for Type 1P was followed at the end of the coming year and assuming the inventory
is not expected to be impaired?
a. 14,793,529
b. 17,355,882
c. 14,091,176
d. Cannot be determined
53. The Golden Monkey Company is preparing its cash budget for the month of October. The following
information is available concerning its accounts receivable:

Estimated credit sales for October P160,000

Actual credit sales for September 175,000
Estimated collections in October for credit sales in October 25%
Estimated collections in October for credit sales in September 60%
Estimated collections in October for credit sales prior to September P12,000
Estimated write-offs in October for uncollectible credit sales 5,000
Estimated provision for bad debts in October for credit sales in October 6,000

What are the estimated cash receipts from accounts receivable collections in October?
a. P149,000
b. P157,000
c. P142,000
d. P150,000

54. Hibiscus, Inc. projects the following activities related to its financial operations:

a. Issuance of shares of company‟s own common stock: P165,000

b. Issuance of mandatorily redeemable preference shares: P35,000
c. Dividends to be paid to the company‟s own shareholders: P27,000
d. Dividends to be paid to redeemable preference shares: P3,000
e. Dividends to be received from investments in other companies shares: P4,000
f. Interest to be paid on the company‟s own bonds: P11,000
g. Repayment of principal on the company‟s own bonds: P50,000
h. Proceeds from sale of the company‟s used equipment: P23,000

In cash financial budget, the net cash used by financing activities should be projected to be
a. P158,000
b. P120,000
c. P123,000
d. P113,000