6.7 Newtake Records Ltd owns a chain of 14 shops selling compact discs. At the beginning of...
Question:
6.7 Newtake Records Ltd owns a chain of 14 shops selling compact discs. At the beginning of June the business had an overdraft of £35,000 and the bank had asked for this to be eliminated by the end of November. As a result, the directors have recently decided to review their plans for the next six months.
The following plans were prepared for the business some months earlier:
Required (working to the nearest £1,000):
(a) Prepare a cash budget for the six months ending 30 November which shows the cash balance at the end of each month.
(b) Prepare the inventories budget for the six months to 30 November which shows the inventories position at the end of each month.
(c) Prepare a budgeted income statement for the whole of the six-month period ending 30 November. (A monthly breakdown of profit is not required.)
(d) What problems is Newtake Records Ltd likely to face in the next six months? Can you suggest how the business might deal with these problems?
Step by Step Answer:
Management Accounting For Decision Makers
ISBN: 9781292072432
8th Edition
Authors: Dr Peter Atrill, Eddie McLaney