8

The five primary purposes of a budget are:

Choose one answer.

	a. planning, allocating resources, facilitating communication and coordination, evaluating competition, controlling profit and operations and allocating fixed costs.
	b. planning, allocating resources, facilitating communication and coordination, controlling profit and operations, and allocating fixed costs.
	c. planning, allocating resources, facilitating communication and coordination, controlling profit and operations, and evaluating competition.
	d. planning, allocating resources, controlling profit and operations, providing incentives, evaluating performance, and allocating fixed costs.
	e. planning, allocating resources, facilitating communication and coordination, controlling profit and operations, evaluating performance and providing incentives.

9

CompuData owns a chain of five shops selling computer goods. In the past the company maintained a healthy cash balance. However, this has fallen in recent months, and at the end of May 2014 it had an overdraft of $100,000. In view of this, CompuDatas managing director has asked you to prepare a cash forecast for the next six months. You have collected the following information:

	June $000s	July $000s	August $000s	September $000s	October $000s	November $000s
Cash sales (cash collections)	250	200	250	350	200	80
Cash purchases	180	160	130	40	50	60
Wages and salaries	40	40	50	40	40	45
Rent			80
Rates						60
Other expenses	25	25	25	25	25	25
Refurbishing shops				80
Total cash disbursements	245	225	285	185	115	190

Referring to the table above. The projected cash balance for the end of June is:

Choose one answer.

	a. $(245,000)
	b. $70,000
	c. ($5,000)
	d. $6,000
	e. $(95,000)

10

Wodonga Company collects 20 per cent of a months sales revenue in the month of sale, 70 per cent in the month following sale, and 6 per cent in the second month following sale. The remainder is uncollectible. The budgeted sales revenue for the next four months is:

	January	February	March	April
Budgeted sales revenue	$200,000	$300,000	$350,000	$250,000

Cash collections in April are budgeted to be:

Answer:

Unit

Number