Reference no: EM132969978

The followng information appared in the balance sheet of xyz ltd at 30 jun 2015

cash at bank 28000

provision for income tax payable in aug 16000

provision of divident payable in june 25000

prepaid rent 2000

land 255 000

Actual slaes and purchase for june and estimated figure for july and aug

                   june            july          aug

sales           32000      295000        255000

purchase    160000          185000    166000

Sales are 20% cash and 80% credit.from previous experience, management knows that 50%of each months credit will be collected in same month as the sales, 50% in the followng month

The company only purchase inventory in credit. from past experience, management knows that 40% of purchase will be paid in the month of purchase and 60% in the following month.

other information.

• the business is planning to pay cash for A NEW motor vechial on 1 aug. the vwchial will cost $65000. it is estimated it will last eight yr and will have a salvage vLUE OF $6500.
• THE company pay rent quaterly every 3month in advance .the quaterly payment has not changed in the past yr and the next payment is due on 1 aug
• telephone monthly bill $2200
• the company expect a sale of some of land to be finalized in july when they will receive $125000
• the only other expenses of xyz ltd apart from one already mention is sales commision which is 35%of sales of month
• bad debts can be ignored

Required

Problem 1: Prepare a cash budged for july and aug including a total column for the two month period and corect tittle