Use the information below to answer question 1 to 22. The financial controller of BOE Ltd. is gathering data to prepare a cash budget for the second quarter of 2018. The following information is available. a) Sales for the first six months of the year are as follows: January February March 23,000 30,000 50,000 57,000 60,000 56,000 April May June a) 40% of all sales are cash sales. b) Of credit sales, 50% are collected in the month of sales and the remaining 50% collected the following month. c) The cost of raw materials equals 35% of each month's sales. 50% of raw materials are paid for in the month of purchase. The remaining 50% are paid in the following month. d) Wages total ¢5,500 per month and are paid for in the month incurred. e) Operating expenses per month totalled ¢16,800 of which ¢2,500 is depreciation and ¢300 is expiration of prepaid insurance premium (the annual premium of ¢3,600 paid in Jan 1). f) Dividend of ¢7,000 declared in March 31 will be paid on April 20. g) Old equipment will be sold in April 4 for ¢1,300. h) On April 13, new equipment will be purchased for ¢8,400. i) The company will maintain a minimum cash balance of¢10,000 from April. i) The cash balance on March 31 amounted to ¢1,350.
Use the information below to answer question 1 to 22. The financial controller of BOE Ltd. is gathering data to prepare a cash budget for the second quarter of 2018. The following information is available. a) Sales for the first six months of the year are as follows: January February March 23,000 30,000 50,000 57,000 60,000 56,000 April May June a) 40% of all sales are cash sales. b) Of credit sales, 50% are collected in the month of sales and the remaining 50% collected the following month. c) The cost of raw materials equals 35% of each month's sales. 50% of raw materials are paid for in the month of purchase. The remaining 50% are paid in the following month. d) Wages total ¢5,500 per month and are paid for in the month incurred. e) Operating expenses per month totalled ¢16,800 of which ¢2,500 is depreciation and ¢300 is expiration of prepaid insurance premium (the annual premium of ¢3,600 paid in Jan 1). f) Dividend of ¢7,000 declared in March 31 will be paid on April 20. g) Old equipment will be sold in April 4 for ¢1,300. h) On April 13, new equipment will be purchased for ¢8,400. i) The company will maintain a minimum cash balance of¢10,000 from April. i) The cash balance on March 31 amounted to ¢1,350.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 72P: Cash Budget The controller of Feinberg Company is gathering data to prepare the cash budget for...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Use the information below to answer question 1 to 22.
The financial controller of BOE Ltd. is gathering data to prepare a cash budget for the second
quarter of 2018. The following information is available.
a) Sales for the first six months of the year are as follows:
January
February
March
23,000
30,000
50,000
57,000
60,000
56,000
April
Мay
June
a) 40% of all sales are cash sales.
b) Of credit sales, 50% are collected in the month of sales and the remaining 50% collected
the following month.
c) The cost of raw materials equals 35% of each month's sales. 50% of raw materials are paid
for in the month of purchase. The remaining 50% are paid in the following month.
d) Wages total ¢5,500 per month and are paid for in the month incurred.
e) Operating expenses per month totalled ¢16,800 of which ¢2,500 is depreciation and ¢300
is expiration of prepaid insurance premium (the annual premium of ¢3,600 paid in Jan 1).
f) Dividend of ¢7,000 declared in March 31 will be paid on April 20.
g) Old equipment will be sold in April 4 for ¢1,300.
h) On April 13, new equipment will be purchased for ¢8,400.
i) The company will maintain a minimum cash balance of ¢10,000 from April.
j) The cash balance on March 31 amounted to ¢1,350.
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