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

What is the break-even sales, If fixed costs are $259,238, the unit selling...

If fixed costs are $259,238, the unit selling price is $112, and the unit variable costs are $63, what is the break-even sales (units)?

Profitability index of a project, Using the profitability index, which of t...

Using the profitability index, which of the following projects should be accepted? Project M:  NPV = $60,000     NINV =    $200,000 Project N:  NPV = $10,000     NINV =     $

Operating segments, Vincent Ltd operates solely in Western Australia and th...

Vincent Ltd operates solely in Western Australia and the chief operating decision maker has identified five operating segments: Mining, Insurance, Retailing, Manufacturing and Tran

EPS, Do you help with assignments

Do you help with assignments?

Prepare a statement of financial position, SE CTION A QUESTION 1: ...

SE CTION A QUESTION 1: Below is a trial balance of a manufacturer of boots for the local market. Trial balance as at 31st December 2012 Dr Rs

Receiver appointed by court-bankruptcy and liquidation, Receiver appointed ...

Receiver appointed by court If appointed by the court, the receiver must give security as directed by the court. The following notification must be given: (a) The debenture h

Compute the future value - shorter compounding period, Compute the future v...

Compute the future value of Rs.5000 at the end of 6 years, whether nominal interest rate is 12 percent and the interest is allocated (payable) quarterly at frequency = 4 Soluti

Calculate break-even point and qualitative factors, Evaluating a Company's ...

Evaluating a Company's Budget Procedures Springfield Corporation operates on a calendar-year basis.  It begins the annual budgeting process in late August, when the president

What is amount per share, Q. What is Amount per share? Par Value - Amou...

Q. What is Amount per share? Par Value - Amount per share set in ARTICLES OF INCORPORATION of a CORPORATION to be entered in CAPITAL STOCKS account where it's left permanently

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