HASF PVT.LTD BUDGETED INCOME STATEMENT FOR 1st QUARTER 1999 Description JANUARY FEBRUARY MARCH Sales 285,000 323,000 221,000 Purchases 129,000 168,000 95,000 Wages 35,000 37,000 30,000 Supplies 26,000 23,000 21,500 Utilities 6,500 8,700 7,200 Rent 15,000 12,800 13,600 Insurance 12,000 12,000 12,000 Advertising 24,500 28,500 18,000 Depreciation 20,000 20,000 20,000 Net Profit 17,000 13,000 3,700 Required: 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 = 165,000 Please see attached Budgeted Income Statement for 1st Quarter 1999 Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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HASF PVT.LTD
BUDGETED INCOME STATEMENT
FOR 1^st QUARTER 1999

Description	JANUARY	FEBRUARY	MARCH
Sales	285,000	323,000	221,000
Purchases	129,000	168,000	95,000
Wages	35,000	37,000	30,000
Supplies	26,000	23,000	21,500
Utilities	6,500	8,700	7,200
Rent	15,000	12,800	13,600
Insurance	12,000	12,000	12,000
Advertising	24,500	28,500	18,000
Depreciation	20,000	20,000	20,000
Net Profit	17,000	13,000	3,700

Required:

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 = 165,000
Please see attached Budgeted Income Statement for 1st Quarter 1999

Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200)

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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