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

Calculate the net present value, You are a Senior Financial Manager in the ...

You are a Senior Financial Manager in the recently privatised Sodor Railway Engineering Corporation Plc (SREC). (a) Subsequent to privatisation the Chief Executive Officer of SR

The maturity date of a note receivable, The maturity date of a note receiva...

The maturity date of a note receivable 1. Is the day of the credit sale 2. Is the day the note was signed 3. Is the day the note is due to be paid 4. Is the date of the first payme

Show the calculations and journal entries, In the current year, Company A i...

In the current year, Company A is formed with $630,000 in capital from the sale of 21,000 shares of stock at $30 a share. Company A, which has no other operations, immediately acqu

What is the net cash provided by investing activities, Zoum Corporation had...

Zoum Corporation had the following transactions during 2014: 1. Issued $125,000 of par value common stock for cash. 2. Recorded and paid wages expense of $60,000. 3. Acquired land

Uniform capitalization rules, Uniform Capitalization Rules- These are a se...

Uniform Capitalization Rules- These are a set of rules intended to be a single comprehensive set of rules to govern capitalization, or inclusion in INVENTORY of indirect and direc

Calculate the standard deviation of ibm and att, Question: ...

Question: State of the Economy Probability of state occurring IBM Return (%) ATT Return (%)

Bond''s yield to maturity, A 15-year, 14% semiannual coupon bond with a par...

A 15-year, 14% semiannual coupon bond with a par value of $1,000 may be known as in 4 years at a call price of $1,075. The bond sells for $1,050. (Suppose that the bond has just be

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