PR 1 - Cash receipts budget

Prepare the Cash budget for the months of January, February and March. (Ignoring GST in this quarter).

Winloose is preparing its budgets for the quarter ending 31 March. The following data is provided.

Actual Sales

November December Forecast Sales:

$80,000 100,000 January February March

$90,000 $70,000 $50,000

Estimated collections are:

40% of all sales are on credit

50% are collected in the month of sale, with a 2% discount,

30% in the month following sale, and

20% in the second month after sale,

Purchases are estimated at 60% of budgeted sales for the particular month,

80% pf these purchases are paid in the month of purchase and a 3% discount is received,

20% of purchases are paid in the following month.

Budgeted cash expenses from January are as follows:

Advertising $1,000

Salaries/Wages 8000

Rent 3,500

Interest on Mortgage 500

General expenses 2,000

Salaries and wages will increase by 8% from 1 February. Other cash expenses will remain the same.

Drawings by the Owner amount to $8,000 per month.

The P.A.Y.G. Tax Payable for the December Quarter is $5,000. This amount to be paid by the end of January.

The Bank account balance at 1 January is $4,269.

NB: complete Cash Receipts budgets - Cash Payment Budget- Cash Budget, using the information provided

PR 2:

Review the Cash Budget prepared in PR 2 on the information contained in that budget and considering the statement in PR2.1.

PR 2.1

The management of Winloose has a policy to keep a minimum of $15000 in cash at the end of each month and wants to utilise any excess of $15000 cash at the end of month for gainful purposes. Critically analyse the cash position of Winloose at the end of every month and suggest the options available to the management to meet the policy requirements.

PR 2.2.1

• complete Revenue Budgets