Prepare a cash budget, Financial Accounting

Assignment Help:

Question:

The accountant of a company is preparing the cash budget for the first six months of 2011 and obtains the following information:

Sales on credit, variable costs and wages are budgeted as follows (the November and December of the previous year being the actual figures for those months):

1705_Prepare a cash budget.png

Fixed expenses amount to Rs 1,500 net per month and the half year's preference dividend of Rs 1,400 net is due on June 30. Corporation tax amounting to Rs 8,000 is payable in January and progress payment under a building contract are due as follows:

March 31st Rs 5,000 and May 31st Rs 6,000.

The terms on which goods are sold are net cash in the month following delivery. Variable costs are payable in the month following that in which they are incurred and are as to 50% subject to 2½% discount, and the balance net. It is found that 75% of debtors to whom sales are made pay within the period of credit and the remainder do not pay until the following month. The company pays all its accounts promptly.

Prepare a cash budget.


Related Discussions:- Prepare a cash budget

Process of abc analysis - inventory control, Process of ABC Analysis •...

Process of ABC Analysis • Classification:   On the origin of expected use, the items of inventory are categorized according to their categories and per unit Price of each item

Illustration of consolidated cashflow statements, Illustration of consolida...

Illustration of consolidated cashflow statements The voice of the Nation Limited is a Nairobi based media company. Its Consolidated Income Statement for the year ended 30 April

Effect of additional debt finance on financial position, Q. Effect of Addit...

Q. Effect of Additional Debt Finance on Financial Position? Debt finance of $3·2m would raise gearing on a book value basis from 54% to 203% ((1167 + 3200)/2150) which is five

Small business stock, Small Business Stock -No corporate investors can excl...

Small Business Stock -No corporate investors can exclude up to 50 percent of the GAIN they realize on disposition of qualified small business stock issued after Aug. 10, 1993 and h

Acid-test ratio, What is Acid-test ratio A measurement of the capabilit...

What is Acid-test ratio A measurement of the capability of a business to meet its short-term commitments. It is considered by dividing excluding stock, current assets, by curre

Ledger, “Ledger is said to be the principal book entry and the transactions...

“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.

Derivation of formulas of capital recovery factor, Derivation of Formulas ...

Derivation of Formulas i) Future Value of an Annuity Future value of an annuity is FVA n = A(1 + k) n -1 + A (1 + k) n - 2   + .......A (1 + k) + A     ............

Home work, 1. The acceptance of a capital budgeting project is usually eval...

1. The acceptance of a capital budgeting project is usually evaluated on its own merits. That is, capital budgeting decisions are treated separately from capital structure decision

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