Question
Specifically, discuss how the cash budget in Appendix B (for James Freeman and Family Enterprise for the year 2020), and the statement of financial position
- Specifically, discuss how the cash budget in Appendix B (for James Freeman and Family Enterprise for the year 2020), and the statement of financial position in Appendix C (for Janet Zhang) could be useful to (i) employees, and (ii) lenders of the respective organisations. . (12 marks)
Appendix B: Cash Budget for James Freeman and Family Enterprise for the year 2020
Q1
Q2
Q3
Q4
Total
RECEIPTS (INFLOWS):
CASH SALE (60%)
60,000
72,000
120,000
180,000
432,000
1 MONTH CREDIT SALES (40%)
40,000
40,000
48,000
80,000
208,000
ADDITIONAL CAPITAL
40,000
-
-
-
40,000
TOTAL INFLOWS
140,000
112,000
168,000
260,000
680,000
PAYMENTS (OUTFLOWS):
PURCHASES
40,000
50,000
90,000
120,000
300,000
PURCHASE OF EQUIPMENT
180,000
-
-
-
180,000
ADMIN.
5,000
5,000
6,000
10,000
26,000
WAGES / SALARIES
10,000
12,000
14,000
16,000
52,000
TOTAL OUTFLOWS
235,000
67,000
110,000
146,000
558,000
NET CASH FLOW [SURPLUS/(DEFICIT)]
(95,000)
45,000
58,000
114,000
122,000
OPENING BALANCE
35,000
(60,000)
(15,000)
43,000
35,000
CLOSING BALANCE
(60,000)
(15,000)
43,000
157,000
157,000
Appendix C: Statement of Financial Position of Janet Zhang as at 31st December 2019
Non-Current Assets:
Plant & Machinery
Buildings
Motor Vehicles at cost
Fixtures & Fittings
Current Assets:
Inventory
Trade receivables
Cash at Bank
Less: Current Liabilities
Trade payables
Net current assets (working capital)
Total Assets CL
Less: Non- Current Liabilities
..
..
Net Assets
Financed by:
Capital
Profit
LESS: Drawings
18,000
26,010
3,092
47,102
(20,386)
0
0
5,000
50,000
10,800
2,100
67,900
26,716
94,616
(0)
94616
93,450
8,366
101,816
(7,200)
94,616
Appendix B: Cash Budget for James Freeman and Family Enterprise for the year 2020
|
| Q1 | Q2 | Q3 | Q4 | Total |
| RECEIPTS (INFLOWS): |
|
|
|
|
|
| CASH SALE (60%) | 60,000 | 72,000 | 120,000 | 180,000 | 432,000 |
| 1 MONTH CREDIT SALES (40%) | 40,000 | 40,000 | 48,000 | 80,000 | 208,000 |
| ADDITIONAL CAPITAL | 40,000 | - | - | - | 40,000 |
|
|
|
|
|
|
|
| TOTAL INFLOWS | 140,000 | 112,000 | 168,000 | 260,000 | 680,000 |
|
|
|
|
|
|
|
| PAYMENTS (OUTFLOWS): |
|
|
|
|
|
| PURCHASES | 40,000 | 50,000 | 90,000 | 120,000 | 300,000 |
| PURCHASE OF EQUIPMENT | 180,000 | - | - | - | 180,000 |
| ADMIN. | 5,000 | 5,000 | 6,000 | 10,000 | 26,000 |
| WAGES / SALARIES | 10,000 | 12,000 | 14,000 | 16,000 | 52,000 |
|
|
|
|
|
|
|
| TOTAL OUTFLOWS | 235,000 | 67,000 | 110,000 | 146,000 | 558,000 |
|
|
|
|
|
|
|
| NET CASH FLOW [SURPLUS/(DEFICIT)] | (95,000) | 45,000 | 58,000 | 114,000 | 122,000 |
| OPENING BALANCE | 35,000 | (60,000) | (15,000) | 43,000 | 35,000 |
| CLOSING BALANCE | (60,000) | (15,000) | 43,000 | 157,000 | 157,000 |
Appendix C: Statement of Financial Position of Janet Zhang as at 31st December 2019
|
| ||
| Non-Current Assets: Plant & Machinery Buildings Motor Vehicles at cost Fixtures & Fittings
Current Assets: Inventory Trade receivables Cash at Bank
Less: Current Liabilities Trade payables
Net current assets (working capital) Total Assets CL
Less: Non- Current Liabilities .. .. Net Assets
Financed by: Capital Profit
LESS: Drawings |
18,000 26,010 3,092 47,102
(20,386)
0 0
|
5,000 50,000 10,800 2,100 67,900
26,716 94,616
(0) 94616
93,450 8,366 101,816 (7,200) 94,616
|
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The Auditors Guide Of 1869 A Review And Computer Enhancement Of Recently Discovered Old Microfilm Of Americas First Book On Auditing By H J Mettenheimer
Authors: Peter L. McMickle, Paul H. Jensen
1st Edition
0367534622, 978-0367534622
