From the following data, construct a cash budget for the six months ending 31 December 2022. a.
Question:
From the following data, construct a cash budget for the six months ending 31 December 2022.
a. Purchases and sales are expected to be as follows:
a.
b. The selling price of each unit is £50.
c. The purchase price of each unit is £20, but this will rise by 20% on 1 October 2022.
d. Purchases are paid for one month in arrears.
e. 25% of sales are for cash, with each sale receiving a 4% cash discount. The remainder will delay payment by one month.
f. Trade receivables as at 30 June 2022 amounted to £4,500.
g. Trade payables as at 30 June 2022 amounted to £2,800.
h. A new van is expected to be purchased in September, which would cost £18,000. The old van would be traded in at a value of £5,000. However, only half of the net purchase price would be paid then. The remainder would be paid in 2023.
i. Wages and salaries amount to £3,000 per month, paid in the month incurred.
j. Overhead expenses will be £900 per month, paid when incurred.
k. On 1 July 2022 the bank balance was £9,000.
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