Question three

The following is the Trail Balance of Still Enterprise as at the end of 30 September 2017.

Dr Cr $

$ Inventory: 1 October 2016 41,600

Carriage outwards 2,100

Carriage inwards 3,700

Returns inwards 1, 540

Returns outwards 3,410

Purchases 188,430

Sales 380,400

Salaries and wages 61,400

Warehouse rent 3,700

Insurance 1,356

Motor expenses 1,910

Office expenses 412

Lighting and heating expenses 894

General expenses 245

Premises 92,000

Motor vehicles 13,400

Fixtures and fittings 1,900

Accounts receivable 42,560

Accounts payable 31, 600

Cash at bank 5,106

Drawings 22,000

Capital 68,843

484,253 484,253

Inventory at 30 September 2017 was $44,780

Required Draw up an income statement for the year ending 30 September 2017, and a statement of financial position as at that date.

Budgeting

Question one

A company has 1,000 units of finished goods held in stock at the start of the month. It produces a further 4,000 units during the month and sells 4,200. How many units are in store at the end of the month?

Question two

The sales budget for the Business Solutions Company for the first six months of the year is;

January 12,000

February 13,000

March 14,000

April 13,500

May 12,600

June 11,100

There are no debtors at the start of January. One months credit is allowed to customers.

What is the budgeted cash received in each month?

Question three

Trade creditors at the start of January are 12,500.

They are all paid during January. During the month, goods costing 18,000 are purchased, and at the end of January there is an amount of 13,600 owing to trade creditors.

State the amount of cash paid to trade creditors during January.

Question four

The cost of indirect materials in any month is 40% variable (varying with direct labour hours) and 60% fixed.

The total cost of the indirect materials during the month of March was budgeted at 500.

During the month of April, it is expected that the direct labour hours will be 20% higher than during March.

What should be budgeted for the cost of indirect materials in April?

Question five

A manufacturing company makes product F, for which the variable overhead cost is GHS2 per unit.

Fixed costs are budgeted at GHS450,000 for the year, of which 130,000 are depreciation charges.

The remaining fixed costs incurred at a constant rate every month, with the exception of factory costs, which are GHS80,000 each year, payable 50% in December and 50% in June. With the exception of rental costs, 10% of overhead expenses are paid for in the month in which they occur and the remaining 90% are paid in the following month. The budgeted production quantities of products F are: Month Units September 40,000 October 60,000 November 50,000 December 30,000

Prepare a month by month cash flow forecast for overhead payments in the period October December,

Question six

A business has estimated that 10% of its sales will be cash sales, and the remainder credit sales.

It also estimated that 50% of receivables will be paid in the month following sale, 30% two months after sales, 15% three months after sales.

Total sales figure as follows:

Month Sales (GHS)

October 80,000

November 60,000

December 40,000

January 50,000

February 60,000

March 90,000

Prepare a month by month forecast of cash receipts from sales for the months January March