Q.No.1 M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: -Creditors are settled in the very next month of purchase.Salaries are paid in the current month.Fixed costs are paid in one-month arrears.Manufacturing expenses are paid in one-month advance.Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.Credit Sales are settled as follows;10% in the month of sales40% in the next month40% in the next following month, and the balance represents bad debts.A dividend of PKR 10,000 is payable in June.Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000.On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1st installment is made in advance on March 1. MonthCash SalesCredit SalesCredit PurchasesCash PurchasesSalariesFixed OHManufacturing expensesJanuary50000100008500500018000110007000February600002000012000600018000110008000March400003000012000400019000110009000April6000040000150007000190001100010000May7000035000150008000200001100011000June7500025000105009000200001100012000 Required:Prepare Cash Budget for March, April and May. Q.No.1M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the followinginformation is available: -a) Creditors are settled in the very next month of purchase.b) Salaries are paid in the current month.c) Fixed costs are paid in one-month arrears.d) Manufacturing expenses are paid in one-month advance.e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.f) Credit Sales are settled as follows;а.10% in the month of salesb. 40% in the next monthc. 40% in the next following month, and the balance represents bad debts.g) A dividend of PKR 10,000 is payable in June.h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000.i)On March 1, we will buy an equipment on lease and its payment will be done in monthlyinstalments of PKR 5000 each, 1st installment is made in advance on March 1.MonthCashCreditCreditCashSalariesFixedManufacturingSalesSalesPurchasesPurchasesOHexpenses700010000JanuaryFebruary50000850050001800011000600002000012000600018000110008000March400003000012000400019000110009000AprilMay60000400001500070001900011000100007000035000150008000200001100011000June7500025000105009000200001100012000Required:a) Prepare Cash Budget for March, April and May.

The details regarding cash budget is given Required. Prepare Cash Budget for March, April and May.

Q.No.1 M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: - a) Creditors are settled in the very next month of purchase. b) Salaries are paid in the current month. c) Fixed costs are paid in one-month arrears. d) Manufacturing expenses are paid in one-month advance. e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH. f) Credit Sales are settled as follows; a. 10% in the month of sales b. 40% in the next month 40% in the next following month, and the balance represents bad debts. с. g) A dividend of PKR 10,000 is payable in June. h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000. i) On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1st installment is made in advance on March 1. Month Cash Credit Credit Cash Salaries Fixed Manufacturing Purchases 5000 Sales Sales Purchases OH expenses 7000 50000 10000 11000 January February 8500 18000 60000 20000 12000 6000 18000 11000 8000 March 40000 30000 12000 4000 19000 11000 9000 April May June 60000 40000 15000 7000 19000 11000 10000 70000 35000 15000 8000 20000 11000 11000 75000 25000 10500 9000 20000 11000 12000 Required: a) Prepare Cash Budget for March, April and May.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 14E

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Question

Q.No.1

M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: -

Creditors are settled in the very next month of purchase.
Salaries are paid in the current month.
Fixed costs are paid in one-month arrears.
Manufacturing expenses are paid in one-month advance.
Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.
Credit Sales are settled as follows;
1. 10% in the month of sales
2. 40% in the next month
3. 40% in the next following month, and the balance represents bad debts.
A dividend of PKR 10,000 is payable in June.
Capital expenditure for buying a plant was incurred on 28^th February of PKR 50,000.
On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1^st installment is made in advance on March 1.

Month	Cash Sales	Credit Sales	Credit Purchases	Cash Purchases	Salaries	Fixed OH	Manufacturing expenses
January	50000	10000	8500	5000	18000	11000	7000
February	60000	20000	12000	6000	18000	11000	8000
March	40000	30000	12000	4000	19000	11000	9000
April	60000	40000	15000	7000	19000	11000	10000
May	70000	35000	15000	8000	20000	11000	11000
June	75000	25000	10500	9000	20000	11000	12000

Required:

Prepare Cash Budget for March, April and May.

Q.No.1
M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following
information is available: -
a) Creditors are settled in the very next month of purchase.
b) Salaries are paid in the current month.
c) Fixed costs are paid in one-month arrears.
d) Manufacturing expenses are paid in one-month advance.
e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.
f) Credit Sales are settled as follows;
а.
10% in the month of sales
b. 40% in the next month
c. 40% in the next following month, and the balance represents bad debts.
g) A dividend of PKR 10,000 is payable in June.
h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000.
i)
On March 1, we will buy an equipment on lease and its payment will be done in monthly
instalments of PKR 5000 each, 1st installment is made in advance on March 1.
Month
Cash
Credit
Credit
Cash
Salaries
Fixed
Manufacturing
Sales
Sales
Purchases
Purchases
OH
expenses
7000
10000
January
February
50000
8500
5000
18000
11000
60000
20000
12000
6000
18000
11000
8000
March
40000
30000
12000
4000
19000
11000
9000
April
May
60000
40000
15000
7000
19000
11000
10000
70000
35000
15000
8000
20000
11000
11000
June
75000
25000
10500
9000
20000
11000
12000
Required:
a) Prepare Cash Budget for March, April and May.

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