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

Depriciation , an asset has a useful life of 4 years.If it is depriciated b...

an asset has a useful life of 4 years.If it is depriciated by diminishing balance method.Its book value at the end of 4 years is 24% of its original cost.Hence the rate of depricia

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     ............

Bank reconcillation statement, cheque issued and presented for payment 400 ...

cheque issued and presented for payment 400 in cash book debit balance

Effects of the appointment of the receiver-bankruptcy, Effects of the appoi...

Effects of the appointment of the receiver Floating charges: these crystallise on the appointment of a receiver and become fixed on the assets then in the hands of the compan

Prepare income statement for 2011, The Wanless Corporation provides Interne...

The Wanless Corporation provides Internet consulting services to a wide-range of customers. The company's fiscal year ends on December 31. For the year ended December 31, 2011, the

What is the amount of liabilities, Craig's Cars has assets of $4,550 and st...

Craig's Cars has assets of $4,550 and stockholders' equity of $3,200. What is the amount of liabilities? What is the amount of claims?

To observe terms of trust-trusts laws and accounts, To observe terms of tru...

To observe terms of trust   Trustees must comply with the trust instrument and the rules of equity; they need not consult the beneficiaries or take instructions from them; but the

Illustration of marked up by an additional amount, Illustration of marked u...

Illustration of marked up by an additional amount E Limited sent goods to its branch in Thika invoiced at selling price, which was cost plus 505 of cost.  On 1st July 20X2, the

Retirement benefits and why it is shown in annual report, Retirement benefi...

Retirement benefits 1)      Provident fund and family pension: a.       Contribution to PF and PPF are provided for and payments in respect thereof are made to the relevant

The principle of revenue, The principle that (1) requires revenue to be re...

The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3

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