Project 3-Cash budgets and budgeted financial statements (Chapters 4 and 5) Question 1 P. Tiro provides you with the following figures: March actual sales 42 000 39 000 April budgeted sales May budgeted sales June budgeted sales 36 000 25 200 Sales are expected to be 70% credit and 30% cash and include GST. Invoices for credit sales are issued at the end of the month. Accounts receivable pay: 70% within 30 days of invoice receiving 5% discount. Discount is recognised in the month it is allowed. 20% within 60 days. 5% within 90 days. 5% bad debts. Accounts receivable balances as at 31 March are $47400. The ageing list shows chat this balance is dissected as follows: Month of sale 2$ 3 800 January February March 14 400 29 400 Purchases (GST inclusive) are paid for in the month in which they are made. Budgeted purchases are: Aril May June 24 000 22 800 12 000 Marketing expenses (GST inclusive) are budgeted at 10% of sales and are paid in the month they are incurred. Other expenses are expected to be: April May June 9 000 7 200 10 800 Other expenses are paid in the same month they are incurred and include GST except for depreciation. Depreciation is included in other expenses and is $3 000 per month. Equipment will be paid for on 15 June for $30 000 (including GST). GST is accounted for by the cash method. Cash balance at 31 March is $48 000. Required Prepare a cash budget for April, May and June showlng monthly flgures.
Project 3-Cash budgets and budgeted financial statements (Chapters 4 and 5) Question 1 P. Tiro provides you with the following figures: March actual sales 42 000 39 000 April budgeted sales May budgeted sales June budgeted sales 36 000 25 200 Sales are expected to be 70% credit and 30% cash and include GST. Invoices for credit sales are issued at the end of the month. Accounts receivable pay: 70% within 30 days of invoice receiving 5% discount. Discount is recognised in the month it is allowed. 20% within 60 days. 5% within 90 days. 5% bad debts. Accounts receivable balances as at 31 March are $47400. The ageing list shows chat this balance is dissected as follows: Month of sale 2$ 3 800 January February March 14 400 29 400 Purchases (GST inclusive) are paid for in the month in which they are made. Budgeted purchases are: Aril May June 24 000 22 800 12 000 Marketing expenses (GST inclusive) are budgeted at 10% of sales and are paid in the month they are incurred. Other expenses are expected to be: April May June 9 000 7 200 10 800 Other expenses are paid in the same month they are incurred and include GST except for depreciation. Depreciation is included in other expenses and is $3 000 per month. Equipment will be paid for on 15 June for $30 000 (including GST). GST is accounted for by the cash method. Cash balance at 31 March is $48 000. Required Prepare a cash budget for April, May and June showlng monthly flgures.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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Transcribed Image Text:Project 3-Cash budgets and budgeted financial
statements (Chapters 4 and 5)
Question 1
P. Tiro provides you with the following figures:
March actual sales
April budgeted sales
May budgeted sales
June budgeted sales
42 000
39 000
36 000
25 200
Sales are expected to be 70% credit and 30% cash and include GST.
Invoices for credit sales are issued at the end of the month.
Accounts receivable pay:
70% within 30 days of invoice receiving 5% discount. Discount is recognised in
the month it is allowed.
20% within 60 days.
5% within 90 days.
5% bad debts.
Accounts receivable balances as at 31 March are $47400. The ageing list shows
that this balance is dissected as follows:
Month of sate
January
February
March
3 600
14 400
29 400
Purchases (GST inclusive) are paid for in the month in which they are made.
Budgeted purchases are:
April
May
June
24 000
22 800
12 000
Marketing expenses (GST inclusive) are budgeted at 10% of sales and are paid in
the month they are incurred.
Other expenses are expected to be:
April
May
June
9 000
7 200
10 800
Other expenses are paid in the same month they are incurred and include GST
except for depreciation. Depreciation is included in other expenses and is $3 000 per
month.
Equipment will be paid for on 15 June for $30000 (including GST).
GST is accounted for by the cash method.
Cash balance at 31 March is $48 000.
Required
Prepare a cash budget for April, May and June showIng monthly figures.
Questlon 2
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