Answered step by step
Verified Expert Solution
Question
1 Approved Answer
o Value Products Ltd manufactures a single product. You are the management accountant responsible for preparing the quarterly budgets of the next quarter from January
o Value Products Ltd manufactures a single product. You are the management accountant responsible for preparing the quarterly budgets of the next quarter from January to March 2022. Your colleague, the financial accountant, has provided you the following extracted data from the balance sheet as at 31 December 2021: Assets Accounts Receivable $250,000 Plant and Machinery $800,000 (Cost) Liabilities Bank Overdraft Dividend Payable $90,000 $10,000 Long-term Loan 15% $400,000 The following transactions are expected during the next three months: Sales Purchases Expenses January $1,500,000 $1,000,000 $200,000 February 2,000,000 1,500,000 250,000 March 3,000,000 2,800,000 300,000 All sales are on credit and the cash collections have the following pattern: During the month of sale: In the subsequent month: 80% (early payment discount of 4% is given) 20% (no discount) Payments for purchase are made in the month of purchase enjoying a 10% early payment discount. Expenses shown above include depreciation of machinery which is calculated at a rate of 12% per annum on cost. Expenses are paid for in the month in which they are incurred
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started