Question
hi, could you please help me, to complete cash budget Question 1 - Budget Preparation Cheap Phones Ltd Cheap Phones Ltd supplies mobile phones to
hi, could you please help me, to complete cash budget
Question 1 - Budget Preparation Cheap Phones Ltd
Cheap Phones Ltd supplies mobile phones to its customers. You have been given the following information.
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Budgeted sales: 1,600 units November; 1,700 units December: 1,650 units January
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Sales value $200 a unit
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Collections: o 65%inmonth of sale
o 30%month following
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o 5%not collectible
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Cost of goods sold is 50% of sales
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Ending merchandise inventory is to equal 25% of the following months cost of goods
sold
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Goods are paid for in the month following purchase
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Other monthly expenses paid for in cash are $17,000
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Monthly depreciation is $6,000
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Ignore taxes
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A minimum cash balance of $135,000 is to be maintained and interest on any
borrowings is 4% per month
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Any unrecoverable sales amounts are to be carried forward in Accounts Receivable until they can be written off officially at year-end.
Statement of Financial Position October 31 20x2
Assets.
Cash $42,000 Accounts receivable (net of uncollectible amounts) Inventory. $16,000
Inventory $30,000 Property, plant and equipment (net of accumulated depreciation). $125,000 Total assets. $213,000
Liabilities and Equity Accounts payable. $12,000 Issued capital. $157,000 Retained earnings. $44,000 Total liabilities and stockholders equity. $213,000
1.Prepare a Sales Budget for November and December
2.Prepare a Purchases Budget for November and December
3.Prepare a Cash Budget for November and December
4.Prepare the Budgeted Income Statement for November and December
5.Prepare a Budgeted Balance sheet for the end of December
There is no seperate Selling and Admin budget required, but any figures that would be required for this will still be included within the Cash Budget, Income Statement and Balance sheet where applicable
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