Full explanation with formulas included
FoxPro Itd sells high quality chocolates and flowers which it buys in bulk, packages and then distributes to customers. The following is a table of estimated revenues and their related costs for the period July 2019 to December 2019. Other costs are included in the notes below: July Aug Sept Oct Nov Dec R'000 R'000 R'000 R'000 R'000 R'000 Sales of chocolates and flowers 500 532 564 612 640 660 Purchases of chocolates and flowers 250 266 282 306 320 330 Administrative expenses 110 120 124 130 136 140 Packaging costs 4 6 6 6 8 8 Miscellaneous expenses 12 12 14 14 16 16 Loan repayments 100 100 Notes: 1. Stocks of chocolates and flowers at 1 Jul 2019 will amount to Rs 500,000. Stocks at 31 December 2019 are estimated at Rs 340,000 2. Suppliers allow one month's credit. Purchases in June 2019 will total Rs120,000 3. 30% of sales are paid in the month of sales. The remainder are paid for in the month following the month of sales, June 2019 sales are expected to be Rs280,000 4. Delivery costs are 1% of sales revenue each month, paid in the month in which they are incurred. Administration and miscellaneous expenses are also paid when they are incurred. 5. Packaging expenses are paid two months after they are incurred. These costs are Rs 2,000 in May 2019 and will be the same in June 2019 6. The bank charges interest of 1% per month for the overdraft, calculated on the closing balances each month, and payable the following month. The bank overdraft at 1 July 2019 is expected to be Rs 310,000 7. Loan repayments refer to a bank loan. Ignore interest on loan 8. The business has no depreciable asset (a) Making all calculations to the nearest Rs'000, prepare for FoxPro Itd a monthly cash budget, in columnar form, for each of the six months to 31 December 2019, showing the cash balance at the end of each month. (17 marks) FoxPro Itd sells high quality chocolates and flowers which it buys in bulk, packages and then distributes to customers. The following is a table of estimated revenues and their related costs for the period July 2019 to December 2019. Other costs are included in the notes below: July Aug Sept Oct Nov Dec R'000 R'000 R'000 R'000 R'000 R'000 Sales of chocolates and flowers 500 532 564 612 640 660 Purchases of chocolates and flowers 250 266 282 306 320 330 Administrative expenses 110 120 124 130 136 140 Packaging costs 4 6 6 6 8 8 Miscellaneous expenses 12 12 14 14 16 16 Loan repayments 100 100 Notes: 1. Stocks of chocolates and flowers at 1 Jul 2019 will amount to Rs 500,000. Stocks at 31 December 2019 are estimated at Rs 340,000 2. Suppliers allow one month's credit. Purchases in June 2019 will total Rs120,000 3. 30% of sales are paid in the month of sales. The remainder are paid for in the month following the month of sales, June 2019 sales are expected to be Rs280,000 4. Delivery costs are 1% of sales revenue each month, paid in the month in which they are incurred. Administration and miscellaneous expenses are also paid when they are incurred. 5. Packaging expenses are paid two months after they are incurred. These costs are Rs 2,000 in May 2019 and will be the same in June 2019 6. The bank charges interest of 1% per month for the overdraft, calculated on the closing balances each month, and payable the following month. The bank overdraft at 1 July 2019 is expected to be Rs 310,000 7. Loan repayments refer to a bank loan. Ignore interest on loan 8. The business has no depreciable asset (a) Making all calculations to the nearest Rs'000, prepare for FoxPro Itd a monthly cash budget, in columnar form, for each of the six months to 31 December 2019, showing the cash balance at the end of each month. (17 marks)
