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 sales 40% in the next month 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 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. 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.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9PA: Mohammed LLC is a growing consulting firm. The following transactions take place during the current...

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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.

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