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

Implementation of abc analysis, Implementation of ABC analysis The foll...

Implementation of ABC analysis The following steps are included in implementing the ABC analysis: 1. Categorize the items of inventories, establishing the expected use in un

Ratio analysis, Have lot of questions please any one help me

Have lot of questions please any one help me

Markov chains, Markov Chains: Markov Chains are named after the Russia...

Markov Chains: Markov Chains are named after the Russian statistician A.A Markov who developed probabilistic models that are often applicable to decision making problems in bu

Linear Programming, Explain with examples five areas where linear programmi...

Explain with examples five areas where linear programming can be applied in Managerial accounting

Management accountant vs financial accountant, Difference between manageria...

Difference between managerial accounting and financial accounting are mentioned below Audience – Internal Vs External Format of Reporting – Free format Vs prescribed

Break even assumptions, underlying assumptions of breakeven analysis and th...

underlying assumptions of breakeven analysis and the limitations of this.

Total overhead cost variance, Problem From the following data, calculat...

Problem From the following data, calculate overhead variances of following: (a) Variable overhead expenditure variance (b) Fixed overhead expenditure variance (c) Total ov

Depreciation, How to calculate straight line depreciation for a partial yea...

How to calculate straight line depreciation for a partial year i.e. Refurb. depreciation starts in may till end of 8 year lease. Therefore its 7.666 years

Transfer pricing-purposes, Transfer Pricing Transfer pricing can contri...

Transfer Pricing Transfer pricing can contribute directly to the process of departmental performance measurement and indirectly to the measurement of product performance. A

Production, Production As you would suspect, effectively directing an o...

Production As you would suspect, effectively directing an organization needs prudent management of production. Because this is a hands-on process, and often entails dealing wit

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