Question 2 - Master Budget

Chobo limited has just employed you as its management account. The following forecast information for the third quarter of the year 2010 has been provided to you:

	October	November	December
Sales expected	10,000 units	12,000 units	15,000 units
Price per unit	GHS 20	GHS 20	GHS 20
Closing stock	GHS 20,000	GHS 15,000	GHS 25,000
Percentage of gross profit on sales	40%	40%	40%
Debtors	GHS 15,000	GHS 30,000	GHS 15,000
Creditors	GHS 25,000	GHS 20,000	GHS 28,000

Balances shown above are at the end of each month. In addition, the desired balances projected for the end of September 2020 are shown below:

	GHS
Non-current assets	500,000
Depreciation	120,000
Stock	18,000
Cash balances expected	80,000
Unpaid tax at the end of the month	3,000
Debtor	25,000
Creditor	30,000

The following information has also been provided for your use:

1. The company rent part of its apartment at a monthly rental of GHS 25,000 and this is expected to remain the same for the next two years.
2. Selling and distribution expenses are expected to be 25% of each month's sales value.
3. Administration and general expenses are expected to be GHS 20,000 per month but this will grow upwards according to the growth in sales value.
4. Non-current asset is depreciated at 2% per month on cost
5. The company has agreed to produce additional non-current asset at cost of GHS 100,000 in November
6. The company has plans to borrow GHS 80,000 from a friend of the director in November which is payable is a year's time without interest
7. The company pays tax at 10% on net profit every month. This payment is actually done in the month after the month in which profit was declared.

You are required to prepare:

1. The budgeted statement of Comprehensive Income per month in columnar form for October, November and December 2020
2. The cash budget per month in columnar form for October, November and December 2020
3. The budgeted statement of financial position per month in columnar form for October, November and December 2020