Star Ltd operates a retail business where Purchases are sold at costplus 25%.The information below are forecast for the first 4 months of theyear 2020.MonthSalesLabourExpensesGH¢GH¢GH¢Jan40,0003,0004,000Feb60,0003,0006,000Mar160,0005,0007,000Apr120,0004,0007,0001. It is management policy to have stock in hand at the end of eachmonth to meet sales demand in the next half month2. Creditors for materials and expenses are paid in the month afterthe purchases are made and expenses incurred; labour is paid infull at the end of each month. Labour cost and expenses aretreated as period cost in the P & L Accounts.3. Expenses include a monthly depreciation charge of GHS2,000.004. 75% of sales are for cash and 25% of Sales are one month credit.5. The company will buy equipment for cash costing GHS18,000.00in February and will pay a dividend of GHS20,000.00 in March,the opening Cash balance at 1st February, is GHS1,000.00Required:a. Prepare a Cash Budget for February and Marchb. Prepare Profit or Loss Accounts for February and March

Purchases Budget Jan Feb March Apr Sales 40,000 60,000…

Answered: a. Prepare a Cash Budget for February…

Business

Accounting

a. Prepare a Cash Budget for February and March b. Prepare Profit or Loss Accounts for February and March

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter22: Master Budget (master)

Section: Chapter Questions

Problem 1R: Ranger Industries has provided the following information at June 30: Other information: Average...

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