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HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1* QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales Purchases Wages Supplies Utilities Rent Insurance Advertising Depreciation Net Profit 285,000 323,000 221,000 129,000 168,000 37,000 95,000 35,000 30,000 26,000 23,000 21,500 6,500 8,700 7,200 15,000 12,800 13,600 12,000 28,500 12,000 12,000 24,500 18,000 20,000 20,000 20,000 17,000 13,000 3,700 Required: a. Please make a cash budget for the months of January, February and March 1999 based on the data for: View Receivable Trend: • 30% of Sales are collected in the month of sale 30% of Sales are collected after the month of sale • 40% of Sales are collected two months after the sale is made View Payable Trend: 10% of Purchases are paid for in the month of purchase • 35% of Purchases are paid after the month of purchase 55% of Purchases are paid two months after the purchase is made Additional Information: Rent and Insurance expense were prepaid at the end of 1998 • All other expenses are paid for in the month they were incurred • November Sales = 195,000 November Purchases = 100,000 December Sales = 250,000 • December Purchases • Please see attached Budgeted Income Statement for 1st Quarter 1999 = 165,000 b. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)

HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1* QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales Purchases Wages Supplies Utilities Rent Insurance Advertising Depreciation Net Profit 285,000 323,000 221,000 129,000 168,000 37,000 95,000 35,000 30,000 26,000 23,000 21,500 6,500 8,700 7,200 15,000 12,800 13,600 12,000 28,500 12,000 12,000 24,500 18,000 20,000 20,000 20,000 17,000 13,000 3,700 Required: a. Please make a cash budget for the months of January, February and March 1999 based on the data for: View Receivable Trend: • 30% of Sales are collected in the month of sale 30% of Sales are collected after the month of sale • 40% of Sales are collected two months after the sale is made View Payable Trend: 10% of Purchases are paid for in the month of purchase • 35% of Purchases are paid after the month of purchase 55% of Purchases are paid two months after the purchase is made Additional Information: Rent and Insurance expense were prepaid at the end of 1998 • All other expenses are paid for in the month they were incurred • November Sales = 195,000 November Purchases = 100,000 December Sales = 250,000 • December Purchases • Please see attached Budgeted Income Statement for 1st Quarter 1999 = 165,000 b. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)

Financial & Managerial Accounting
Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 15.17EX: Profitability ratios The following selected data were taken from the financial statements of...
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HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1* QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales Purchases Wages Supplies Utilities Rent Insurance Advertising Depreciation Net Profit 285,000 323,000 221,000 129,000 168,000 37,000 95,000 35,000 30,000 26,000 23,000 21,500 6,500 8,700 7,200 15,000 12,800 13,600 12,000 28,500 12,000 12,000 24,500 18,000 20,000 20,000 20,000 17,000 13,000 3,700 Required: a. Please make a cash budget for the months of January, February and March 1999 based on the data for: View Receivable Trend: • 30% of Sales are collected in the month of sale 30% of Sales are collected after the month of sale • 40% of Sales are collected two months after the sale is made View Payable Trend: 10% of Purchases are paid for in the month of purchase • 35% of Purchases are paid after the month of purchase 55% of Purchases are paid two months after the purchase is made Additional Information: Rent and Insurance expense were prepaid at the end of 1998 • All other expenses are paid for in the month they were incurred • November Sales = 195,000 November Purchases = 100,000 December Sales = 250,000 • December Purchases • Please see attached Budgeted Income Statement for 1st Quarter 1999 = 165,000 b. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)
Transcribed Image Text:HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1* QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales Purchases Wages Supplies Utilities Rent Insurance Advertising Depreciation Net Profit 285,000 323,000 221,000 129,000 168,000 37,000 95,000 35,000 30,000 26,000 23,000 21,500 6,500 8,700 7,200 15,000 12,800 13,600 12,000 28,500 12,000 12,000 24,500 18,000 20,000 20,000 20,000 17,000 13,000 3,700 Required: a. Please make a cash budget for the months of January, February and March 1999 based on the data for: View Receivable Trend: • 30% of Sales are collected in the month of sale 30% of Sales are collected after the month of sale • 40% of Sales are collected two months after the sale is made View Payable Trend: 10% of Purchases are paid for in the month of purchase • 35% of Purchases are paid after the month of purchase 55% of Purchases are paid two months after the purchase is made Additional Information: Rent and Insurance expense were prepaid at the end of 1998 • All other expenses are paid for in the month they were incurred • November Sales = 195,000 November Purchases = 100,000 December Sales = 250,000 • December Purchases • Please see attached Budgeted Income Statement for 1st Quarter 1999 = 165,000 b. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)
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