Question
Hobby Gardens is a garden design and landscaping business. On 30 June 2021, it had a bank balance of $52,500. Below are estimates for receipts
Hobby Gardens is a garden design and landscaping business. On 30 June 2021, it had a bank balance of $52,500. Below are estimates for receipts and payments for the three months ending 30 September 2021.
| July | August | September | |||||||
| Receipts | |||||||||
| Fees | $ 140.000 | $ 160.000 | $ 200.000 | ||||||
| Proceeds from the sale of surplus non-current assets | $ 100.000 | ||||||||
| Payments | |||||||||
| Salaries and Wages | $ 70.000 | $ 70.000 | $ 70.000 | ||||||
| Supplies | $ 8.500 | $ 9.200 | $ 12.000 | ||||||
| New Equipment | $ 144.000 | ||||||||
| Purchase of plants | $ 42.000 | $ 45.000 | $ 61.000 | ||||||
a. Prepare a monthly cash budget for the three months ending 30 September 2021! b. The owner is wondering what the effect would be on the cash position if they did not buy the new equipment, but instead took advantage of a new rental arrangement. The equivalent equipment would cost $12000 per month under the rental agreement. Redraft the cash budget to show the impact of the rental alternative. Should they lease or buy the equipment?
In which month sale of surplus happen: August
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College Accounting Chapters 1-29
Authors: John J. Wild, Vernon J. Richardson, Ken W. Shaw
2nd Edition
0077398173, 978-0077398170
