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

Dividends out of the capital profits , Dividends out of the capital profits...

Dividends out of the capital profits Dividends out of the capital profits are apportioned on the same basis as dividends out of income (Re. Doughty). (a) Variation of sec

Coupon interest rate , Simon Corporation's bonds have 12 years left over to...

Simon Corporation's bonds have 12 years left over to maturity. Interest is paid yearly, the bonds have a $1,000 par value, and the coupon interest rate is 11.5%. The bonds have a y

Internal audit department and financial statements, Internal audit departme...

Internal audit department and financial statements, Financial Accounting

maximize profit, Natural Furniture Company manufactures three outdoor prod...

Natural Furniture Company manufactures three outdoor products, benches, chairs, and tables. Every product must pass by the following departments before it is shipped: sanding, sawi

Total amount capitalized for the patent account, Gomez incurred $350,000 of...

Gomez incurred $350,000 of research and development costs to develop a product for which a patent was granted on January 2, 2008. Legal fees and other costs associated with the reg

#accounting concepts, #what are the limitations or disadvantages of account...

#what are the limitations or disadvantages of accounting concept?

Interest-probable debts, Interest Interest may be claimed-up to the dat...

Interest Interest may be claimed-up to the date of the receiving order - if it is payable: By agreement; By statute; If the debt was created in writing and due at a

Resolutions of creditors-bankruptcy, RESOLUTIONS OF CREDITORS Normally,...

RESOLUTIONS OF CREDITORS Normally, decisions at meetings of creditors are taken by ordinary resolution, viz., a resolution passed by a simple majority in value of creditors pre

National association of state boards of accountancy, National Association o...

National Association of State Boards of Accountancy - serves as a forum for 54 State Boards of Accountancy, that administer the uniform CPA examination, license Certified Public Ac

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