Prepare a cash budget, Financial Accounting

Assignment Help:

The following information for the six months ended 31 December 2009 relates to the business of Mr N Morris:

a) Opening cash (including bank) balance Rs 1,200

b) Production in units:

2009                                                                             2010
Apr    May   June   July   Aug   Sept   Oct   Nov   Dec   Jan   Feb
240   270   300    320    350   370    380  340   310   260  250

c) Raw materials used in production cost Rs 5 per unit. Of this 80 percent is paid in the month of production and 20 percent in the month after production.

d) Direct labour cost of Rs 8 per unit are payable in the month of production.

e) Variable expenses are Rs 2 per unit, payable one half in the same month as production and one half in the month following production.

f) Sales at Rs 20 per unit:

2009

Mar   Apr   May   June   July   Aug    Sept   Oct   Nov   Dec
260   200  320   290    400   300    350    400   390   400

Debtors pay their accounts three months after that in which sales are made.

g) Fixed expenses of Rs 400 per month payable each month

h) Machinery costing Rs 2000 to be paid in October 2009.

i) Will receive a legacy of Rs 2500 in December 2009.

j) Drawings to be Rs 300 per month.

Required:

(a) Prepare a cash budget for each of the six months to 31 December 2009, showing the cash balance at the end of each month.

(b) Describe the objectives of budgetary planning and control systems.

(c) Briefly describe the importance of preparing a cash budget.


Related Discussions:- Prepare a cash budget

Continuous compounding, The excessive frequency of compounding is generally...

The excessive frequency of compounding is generally continuous compounding where the interest is compounded immediately. The data for continuous compounding for one year is e APR

Explain productivity linked bonus, Q. Explain Productivity linked bonus? ...

Q. Explain Productivity linked bonus? The grant of productivity-linked bonus is intended to provide substantial motivation towards achieving higher productivity by way of incre

System x is judged to have high risk, Allied Managed Care Company is evalua...

Allied Managed Care Company is evaluating two different computer systems for handling provider claims. There are no incremental revenues attached to the projects, so the decision

Prepare traditional income statement, Scottsdale Fine Piano%u2019s purchase...

Scottsdale Fine Piano%u2019s purchases pianos from a well-known manufacturer and sells them through their retail store. The Baby Grand Pianos sell, on average, for $2,500 each. The

Please prepare an income statement, Simons Corp has unadjusted net income f...

Simons Corp has unadjusted net income from continuing operations before tax of $168,000 before the following items were entered in the accounting records in 2013: 1. Unrealized

Write up the necessary ledger accounts, Question: Agatha Co. is a tradi...

Question: Agatha Co. is a trading company making up its accounts regularly to 31 December each year. At 01 January 2005 the following balances existed in the records of Agat

Legal aspects-autonomous branches, Legal Aspects There is no law relating...

Legal Aspects There is no law relating to branch accounts but examination problems under this heading are frequently linked to either partnership or company account problems. Ans

Event affect your ordering decision for pvc pipe, Your firm's research depa...

Your firm's research department has estimated the income elasticity of demand for Art Deco lawn furniture to be 1.5. You have just learned that due to an upturn in the economy, con

What is cs optimal decision, Copper Suppliers, Inc. (CS), is a distributor ...

Copper Suppliers, Inc. (CS), is a distributor of commercial grade copper. CS purchases copper directly from copper mines and then after refining it, sells the refined copper to in

Analyse the economical performance and monetary position, The statement of ...

The statement of comprehensive income for the year ended 31 December 2009 and its comparative is shown below: 2009 2008 $m

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