Question Two

During the COVID-19 crisis Ben lost his job and decided to put his savings into a new

business called Top End Walkabout Tours. Once the internal travel restrictions were lifted,

he intended to make the most of the NT tourist boom by providing the local hotels with

customised travel experiences in and around the Top End.

He drew up an estimate of his original cash outlay, income and expenses for the three

months to the 30th June 2021.

April May June

Capital investment $83,200

Fees charged (on credit) 26,551 $32,035 $41,847

Fees collected 15,007 19,625 29,437

Office equipment 19,913

Administration expenses 3,175 3,175 3,175

Advertising and

marketing

7,215 5,772 3,463

Monthly cash drawings 3,463 3,463 3,463

Office rent 4,618 4,618 4,618

Required

a. Prepare a monthly cash budget for the three months ending 30th June, 2021.

b. Prepar a variance report for April 2021 incorporating the following information:

Fees received $10,920

Office equipment 21,320

Cash drawings 6,760

All other cash items agreed with the original budget