Answered step by step
Verified Expert Solution
Question
1 Approved Answer
18 marks CH is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to
18 marks CH is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to March are given below: Oct $0OC Nov $000 Dec $000 Jan $00C Feb $006 March $000 Credit sales 300 300 300 310 330 340 Cash sales 70 60 75 65 50 100 Credit purchases 200 165 165 250 250 250 Other operating costs (excluding depreciation) 100 90 100 175 145 95 Seventy per cent of the value of credit sales is received in the month after sale, 15 per cent two months after sale and 10 per cent three months after sale. The balance is written off as a bad debt. Eighty per cent of the value of credit purchases is paid in the month after purchase and the remaining 20 per cent is paid two months after purchase. All other operating costs are paid in the month they are incurred. CH has placed an order for three new forklift trucks that will cost $15 000 each. The scheduled payment date is in March. The cash balance at 1 January is estimated to be $19 000 Required: Prepare a cash budget for each of the THREE months of January, February and March including the statement of opening cash balance, cash movement for the period and ending balance for each of three months
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started