Simpson Company makes and sells a single product. Budgeted sales for April are $1,150,000. Gross margin is budgeted at 30% of sales. If the net income for April is budgeted at $155,000, budgeted selling and administrative expenses must be:

Budgeted selling and administrative expenses must be $190,000.

Explanation:

Budgeted selling and administrative expenses can be calculated as follows:

Budgeted gross margin = Budgeted sales * Percentage of budgeted sales that is budgeted gross margin = $1,150,000 * 30% = $345,000

Budgeted net income = Budgeted gross margin - Budgeted selling and administrative expenses …………. (1)

Substituting the relevant values into equation (1) and solve for budgeted selling and administrative expenses, we have:

$155,000 = $345,000 - Budgeted selling and administrative expenses

Budgeted selling and administrative expenses = $345,000 - $155,000 = $190,000

Therefore, budgeted selling and administrative expenses must be $190,000.

$90,000

Explanation:

The Trading securities are considered as cash equivalent item and recorded as current assets in the balance sheet, because of its short maturity period. The market value of securities should be reported on the balance sheet as on the year end. So, $90,000 is the appropriate answer for this question.