User Account

All Pages

Profi t Planning, Managerial Accounting

Assignment Help:
SK 2 Chapter 10: Master budgeting
Objective
How organisations strive to achieve their financial goals by preparing
a number of budgets that together form an integrated business plan
known as the master budget. This question tests the ability to
prepare the cash budget to anticipate identification of shortages or
surpluses of cash at specific times in the budget period for decision
making.
Marks allocated 25 marks
Jaya Sdn. Bhd. is a wholesaler. The management of Jaya Sdn. Bhd. has been extremely worried
about the company’s cash position over the last few years. In July 2015, they seek your advice
and ask you to prepare a cash budget.
The estimated sales for the six months to December 2015 are as follows:
July August September October November December
Credit Sales ($) 122,000 137,000 142,000 148,000 134,000 126,000
Cash Sales ($) 12,900 14,500 17,700 20,100 15,000 12,600
Cash is received immediately on cash sales. The company allows customers one month’s credit
on sales other than for cash.
Purchase of goods for resale is made on credit. The company receives two months’ credit on
these purchases. The purchases for the six months to December 2015 are as follows:
July August September October November December
Purchases ($) 62,000 58,000 71,000 80,000 54,000 48,000
An inventory check at the end of the last year has revealed $45,000 of inventory, valued at cost,
is considered obsolete. The company is currently negotiating the sale of this inventory for
$9,500 and anticipates payment in November 2015.
Jaya Sdn. Bhd’s manufacturing overheads are estimated to be $12,000 per month. This
includes a charge for depreciation of $2,000 per month. The company takes one month to pay
these expenses.
Selling and distribution expenses are estimated to be $50,400 per year and are incurred evenly
over the year. One month’s credit is taken.
The company is currently negotiating an advertising programme with an agency. The cost will
be $6,300 in November and $7,700 in December. Payment will be made in cash.
In December the company anticipates paying $3,880 tax to Lembaga Hasil Dalam Negeri.
The company has agreed to purchase new stock handling equipment. The cost of $105,200 is
payable in two equal instalments in October and November 2015.
The company expects in December to be able to take advantage of adjacent property (cost of
$150,000) to expand their operation.
It is estimated that the cash balance at 1 October will be $16,000.
Required:
a) Prepare a cash budget for the months of October, November and December 2015.
(18 marks )
b) Write a report on the cash position over this period, and in particular on ways in which you
think it could be improved.

Related Discussions:- Profi t Planning

Strategic positioning, Strategic Positioning The company must identify ...

Strategic Positioning The company must identify its strategic choices. This can be done from the firm’s objectives, which emanates from the firms mission. Strategies have to be

Explain the ratio analysis according to kosher, Explain the Ratio analysis ...

Explain the Ratio analysis according to kosher A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction i

Why is the activity based costing unaccepable for ex, Ask question #Miwhy i...

Ask question #Miwhy is the activity based costing unaccepable for external financial reportnimum 100 words accepted#

Help, Jackson County Senior Services is a nonprofit organization devoted to...

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three serv

Factors influencing working capital requirements, The working capital needs...

The working capital needs of a firm are influenced by many factors. The important ones are as follows: Nature of business: The working capital necessity of a firm is closely l

Accounting Ratios, Explain TWO limitations of using accounting ratios to as...

Explain TWO limitations of using accounting ratios to assess the performance of a firm and suggest how each limitation may be improved

State direct material cost standard, State Direct material cost standard ...

State Direct material cost standard The determination of direct material cost standard would involve: a) Determination of quantity standards and b) Determination of pric

Explain the growth, Explain the growth, index, sectoral, gilt and money mar...

Explain the growth, index, sectoral, gilt and money market methods? (i) What are the key variations among the open ended and close ended methods? What are the plus and minuses

FINAL ACCOUNTS- FINANCIAL STATEMENTS, Yolande Tzar came to Northern Ireland...

Yolande Tzar came to Northern Ireland from Poland five years ago to study at university. After graduating she worked as a sales manager for a local company and saved her wages to b

Define performance budgeting according u.s. bureau of budget, Define perfor...

Define performance budgeting according U.S. bureau of budget U.S. bureau of budget defines performance budget as one which presents purposes and objectives for which funds are

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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