Prepare the cash budget for the specific

Assignment Help Finance Basics
Reference no: EM131438065

Question: Vierra Popova Ltd now wishes to prepare its cash budget for the second six months of the year. The budgeted income statements for each month of the second half of the year are as follows:


July
£000

Aug
£000

Sept
£000

Oct
£000

Nov
£000

Dec
£000

Sales revenue

57

59

62

57

53

51

Cost of goods sold

32

33

35

32

30

29

Salaries and wages

10

10

10

10

10

10

Electricity

3

3

4

5

6

6

Depreciation

3

3

3

3

3

3

Other overheads

2

2

2

2

2

2

Total expenses

50

51

54

52

51

50

Net profit

7

8

8

5

2

1

The business will continue to allow all of its customers one month's credit. It plans to increase inventories from the 30 June level by £1,000 each month until, and including, September. During the following three months, inventories levels will be decreased by £1,000 each month. Inventories purchases, which had been made on one month's credit until the June payment, will, starting with the purchases made in June, be made on two months' credit. Salaries, wages and ‘other overheads' will continue to be paid in the month concerned. Electricity is paid quarterly in arrears in September and December. At the end of December the business intends to pay off part of a loan. This payment is to be such that it will leave the business with a cash balance of £5,000 with which to start next year.
Required: Prepare the cash budget for the six months ending in December.

(Remember that any information you need that relates to the first six months of the year, including the cash balance that is expected to be brought forward on 1 July, is given in)

Reference no: EM131438065

Questions Cloud

Evaluation of written assignments : Your assignment is to write a short (2-3 page, double-spaced, typed) essay identifying and describing two markets of your choosing; the first characterized by an elastic demand and the second one by an inelastic demand. Indicate why your choices h..
How do you know if a product is elastic or inelastic : How do you know if a product is elastic or inelastic? For example an European vacation and steak.
What about a fine-antique dealer : 1. Does a junk dealer contribute to GDP? What about a fine-antique dealer? How? Why?
What are the intangible characteristics of providers : Intangibility: What are the intangible characteristics of providers (i.e., demeanor, posture, etc.)? How do providers behave toward patients
Prepare the cash budget for the specific : The business will continue to allow all of its customers one month's credit. It plans to increase inventories from the 30 June level by £1,000 each month until, and including, September. During the following three months, inventories levels will b..
What kinds of korean leadership behaviors you expect : What kinds of South Korean leadership behaviors would you expect to include in your report? Describe these in terms of interaction between the U.S. and Korean managers as well as interaction between Korean leader-followers.
Perfectly competitive market and competitive market : What is the difference between perfectly competitive market and competitive market?
Conduct research using the argosy online library : Conduct research using the Argosy online library, your text book and the Internet regarding the differences in culture, management styles, and communication strategies between the U.S. and Cambodia.
Idea of philanthrocapitalism : 1: Promote the idea of philanthrocapitalism by outlining how it would be efficacious in developing impoverished areas of the United States.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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