Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

HH Company is in the process of preparing the cash budget for the last four months of 2022 that is September to December. The following

image text in transcribed

HH Company is in the process of preparing the cash budget for the last four months of 2022 that is September to December. The following information has been made available. Additional information: 1. Selling price is ksh 120 per unit but expected to drop by 5% from 1st November. 2. Payment for goods sold is as follows; - 20% in the month of sales, - 70% the following month after sales and - The balance in the second month after sales. 3. Bad debt is estimated at 3% of sales value. 4. Purchases of goods at ksh 65 per unit are as follows: - September 88,000 units, - October 84,000 units, - November 95,000 units and - December 80,000 units. 5. Goods purchased are paid one month in arrears. 6. Monthly expenses estimated at 15% on sales revenue are paid in the month of incurrence. 7. The company plans to buy a delivery van at ksh 2,700,000,40% of the cost to be paid in October and the balance in January 2023. 8. The Director withdraws ksh 350,000 monthly for personal expenses. 9. Extracts from August figures are as follows: - Debtors ksh 6,600,000 out of which ksh 1,800,000 is part of July sales before bad debt - Creditors for goods ksh 5,200,000 - Cash ksh 1,050,000 Required: Prepare Monthly cash budget for the three months ending December 2022 (10 Marks)

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

Conservation Easement IRS Audit Techniques Guide

Authors: Internal Revenue Service

1st Edition

1304133923, 978-1304133922

More Books

Students also viewed these Accounting questions

Question

10. What is meant by a feed rate?

Answered: 1 week ago

Question

3. Identify challenges to good listening and their remedies

Answered: 1 week ago

Question

4. Identify ethical factors in the listening process

Answered: 1 week ago