Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a) . . . . Lin Wong owns The Delivery Shop, a small transport business that delivers packages. Lin is looking at ways to

image text in transcribedimage text in transcribed

a) . . . . Lin Wong owns The Delivery Shop, a small transport business that delivers packages. Lin is looking at ways to grow her business, so she has provided the following information to help with the preparation of a cash budget for November and December 2020. In 2020 the business made 200 deliveries in November and 300 in December. For each delivery the business charges $150. Lin is planning to buy two new larger delivery vehicles at the beginning of November. This will allow the business to increase the number of deliveries made each month by 25% All deliveries are made on credit, with 60% paid in the month of delivery and 40% paid in the month after delivery. The new delivery vehicles will cost Lin $30 000 each, and must be paid for in cash in November. Other expenses incurred by the business are: Maintenance of $40 per delivery Depreciation on each vehicle is $1 500 per month Rent of $48 000 per year is paid monthly Drivers' wages is $2 750 per month Insurance of $10 per delivery Cash at bank as at 31 October is $27 000 Calculate the expected number of deliveries and the expected revenue for November 2020 and December 2020. Expected number of deliveries Expected Revenue November (2 marks) December b) Prepare the collection from debtors schedule and the cash budget for November 2020 and December 2020. (7 marks) October deliveries (actual-180) Expected November deliveries November 10 800 December Expected December deliveries TOTAL

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

More Books

Students also viewed these Accounting questions

Question

What lessons can businesses learn from this experience? p-687

Answered: 1 week ago

Question

What projects have I completed at home, work, or school?

Answered: 1 week ago

Question

What were the sources and possible causes of the conflict?

Answered: 1 week ago

Question

What is the level of conflict?

Answered: 1 week ago