B. Howe plans to set up a new business commencing 1 September 19_5. The timetable of activities
Question:
B. Howe plans to set up a new business commencing 1 September 19_5.
The timetable of activities planned for the first four months is:
Required:
(a) A cash budget (including bank) to show the monthly balance available from September to December 19_5S. (14 marks)
(b) The budgeted trading and profit and loss accounts for the first four months of trading, and a budgeted balance sheet as at 31 December LOSS:
Transcribed Image Text:
(1) 1 September 19_5: transfer 40 000 into a business bank account. (2) 1 September 19 5: purchase of machinery 4 500, vehicles 3 600, and premises 16 000. Immediate payment by cheque from the business bank account. (3) 20 September 19_5: purchase of goods 4 000 followed by a further 6 400 before the end of the month and thereafter 8 000 each month. Payment for the first purchase will be on 2 October 19_5. Subsequent purchases will be paid for two months after each transaction. (4) In September 19_5 sales are expected to be 8 000 and 10 000 for each month thereafter. Debtors will pay for goods three months after each transaction. (5) On 31 December 19_5 stocks on hand will be valued at 4 000. (6) Wages of 300 per month will be payable on the last day of the month. (7) General expenses of 100 per month will be payable during the month following. (8) 11 000 will be raised by a sale of private investments and paid into the business bank account during mid December 19_5. (9) 460 insurance and rates for the four months will be payable in November 19_5. (10) Drawings by cheque will be 160 per month. (11) Depreciation of vehicles will be at the rate of 20 per cent per annum, and on machinery at 10 per cent per annum.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
Answered By
Diksha Bhasin
I have been taking online teaching classes from past 5 years, i.e.2013-2019 for students from classes 1st-10th. I also take online and home tuitions for classes 11th and 12th for subjects – Business Studies and Economics from past 3 years, i.e. from 2016-2019. I am eligible for tutoring Commerce graduates and post graduates. I am a responsible for staying in contact with my students and maintaining a high passing rate.