Analyse apollo sales cash budget for the period

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Reference no: EM132653278

Apollo Sales P/L is registered for GST as a cash payer and has chosen the option to report and calculate GST every quarter. The following is the Summary of the Business Activity Statement for the Quarter ended 31 December.

Summary of the Business Activity Statement 1 October to 31 December
Amounts you owe the ATO

GST on sales or GST instalment 1A 50300
PAYG tax withheld 4 12,600
PAYG income tax instalment 5A 4,007
8A 66,907
Amount ATO owes you 1B 30,280
GST on purchases 7D 11,654
Fuel tax credits 8B 41,934
9 24,973
Payment Due

A Cash Budget of Apollo Sales P/L has been prepared for the period 1 January to 30 April. This Cash Budget does not include any GST/BAS payments for the December or March Business Activity Statements.

Cash Budget January February march April

Opening Cash Balance $ 16000    $ 18600    $37250 $ 47850
Cash receipt $57,200    $59200                  $63000    $42000
Cash Payment -$54600 -$40,550    -$52,400    -$67,550
Closing cash balance                                 $18,600    $37250    $47,850 22300

Question a) Analyse Apollo Sales P/L cash budget for the period 1 January to 30 April and the December Business Activity Statement. Discuss these documents and the payment schedule of Business Activity Statements if Apollo Sales will have any cash flow issues during this period.

Question b) As the accountant, construct an email addressed to the Manager of the company initiating discussions and providing recommendations to ensure sufficient funds are available to meet statutory requirements e.g. BAS due dates, records retention, valid invoices, ABN checking, cash management.

Reference no: EM132653278

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