Question
Lotus Garden is a garden design and landscaping business. As at 31 December 2020, it had a bank balance of $5000. Provided below are estimates
Lotus Garden is a garden design and landscaping business. As at 31 December 2020, it had a bank balance of $5000. Provided below are estimates for the three months ending 31 March 2021 Additional information:
- Receipts from account customers are received in the following pattern.
- 60% in the month of sale, and 40% in the month following
- Credit sales in December 2020 was $20,000
- All purchases for Gardening Supplies are cash. The anticipated Gardening Supplies on hand at 31st of Jan and 28th of Feb is $3,000 and $5,000 respectively.
- At the end of February, it is anticipated that $5,000 of salaries and wages would remain payable.
- Plant seedlings are purchased on a cash basis
- Administration expenses include depreciation of $750 per month
Using the above information
a. Calculate the total budgeted receipts for the month of FEBRUARY? (2 marks)
b. Calculate the budgeted payment for Gardening Supplies for the month of FEBRUARY? (2 marks)
c. Calculate the budgeted wages payment in the month of FEBRUARY? (1 mark)
d. Calculate the budgeted administration expenses payment for the month of FEBRUARY? (1 mark)
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