Prepare a cash budget for each of the first three months, Financial Accounting

Assignment Help:

Question :

The subsequent data pertain to a shop. The owner has made following sales forecasts for the first 5 months of the coming year.
                                                       £.
January                                       40,000
February                                     45,000
March                                          55,000
April                                             60,000
May                                             50,000

Other data are as follows:

(a) Debtors and creditors' balances at the beginning of the year are £ 30,000 and £14,000 respectively. The balances of other relevant assets and liabilities are:
                                                       £.
Cash balance                              7,500
Stock                                          51,000
Accrued sales commission           3,500

(b) 40% sales are on cash basis. Credit sales are collected in the following month of sale.

(c) Cost of sales is 60% of sales.

(d) The only other variable cost is a 5% commission to sales agents. Sales commission is paid in the month after it is earned, i.e.,time-lag is one month.

(e) Inventory is kept equal to sales needs for the next two months' budgeted sales.

(f) Trade creditors are paid in the subsequent month after purchases.

(g) Fixed costs are £ 5,000 per month, including £ 2,000 depreciation.

Required:

Prepare a cash budget for each of the first three months of the coming year.


Related Discussions:- Prepare a cash budget for each of the first three months

Pv ratio, assignment ofr p V RATIO ANALYSIS

assignment ofr p V RATIO ANALYSIS

Help, Ask question Sean Corp. issued a $60,000, 10 year bond at the face ra...

Ask question Sean Corp. issued a $60,000, 10 year bond at the face rate of 8% annually on 1/1/X0. The market rate was 10%. How much cash will the bond investors receive at the end

Asch experiments, Asch Experiments In these basics studies by Solomon ...

Asch Experiments In these basics studies by Solomon Asch, groups of seven or 8 people were put in a classroom and shown two cards by the experimenter. The first card had a mai

Maximum cost recovery deduction, In May of 2010 a calendar year taxpayer, p...

In May of 2010 a calendar year taxpayer, placed in service $2,137,000 of USED 15-year recovery property. The taxpayer has taxable income of $1,175,000 before the cost recover

Show the expatriation tax, Q. Show the Expatriation Tax? Expatriation T...

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

Acid-test ratio, What is Acid-test ratio A measurement of the capabilit...

What is Acid-test ratio A measurement of the capability of a business to meet its short-term commitments. It is considered by dividing excluding stock, current assets, by curre

Leverage or gearing ratios, Leverage or Gearing Ratios - These ratios inc...

Leverage or Gearing Ratios - These ratios include the Long Term Debt to Equity Ratio, Total Debt to Equity Ratio, Interest Coverage Ratio. Here, the interest coverage ratio is al

Vegetable gowing, disscuss the applicability of a operating cycle in vegeta...

disscuss the applicability of a operating cycle in vegetable growing bussiness in uganda

The statement of changes in equity-financial statement , THE STATEMENT OF C...

THE STATEMENT OF CHANGES IN EQUITY This is a very important report because it explains the movements in the shareholder funds during the year and also acts as a link between the

Managing organisations with multiple objectives, The difficulties associate...

The difficulties associated with managing organisations with multiple objectives To the level that an organisation faces a range of stakeholders then they also face multiple ob

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd