The budgeted Statement of Financial Position data of Aberempon Ltd. is as follows:

 

1 March 2020

Non-current Assets                                        Cost                 Accumulated              Net                                                                                                      Depreciation                                                                                                                           ₵                                 ₵                     ₵

Land and Buildings                                         500,000                       _                      500,000

Machinery and Equipment                             124,000                       84,500               39,500

Motor Vehicles                                                 42,000                       16,400                25,600

                                                                        666,000                       100,900           565,100

Working Capital

Current Assets

Stock of Raw Materials (100 units)                                                       4,320

Stock of Finished Goods (110 units)*                                                10,450

Debtors (January ¢7,680 and February ¢10,400)                               18,080

Cash and Bank                                                                                      6,790

                                                                                                             39,640

Less Current Liabilities

Creditors (Raw Materials)                                                                      3,900                35,740

                                                                                                                                      600,840

 

Represented by:

Stated Capital (Fully paid Ordinary Share of ¢1 each)                                                500,000

Capital Surplus                                                                                                                60,000

Income Surplus                                                                                                               40,840

                                                                                                                                       600,840

*The Stock of Finished Goods was valued at marginal cost.

The estimates for the next four months period are as follows:

                                                            March             April                May                 June 

Sales (units)                                        80                    84                    96                    94

Production (units)                               70                    75                    90                    90

Purchases of Raw Materials (units)    80                    80                    85                    85

Wages and Variable overheads 

    at ¢65 per unit                              ¢4,550             ¢4,875             ¢5,580             ¢5,580

Fixed overheads                                ¢1,200             ¢1,200             ¢1,200             ¢1,200

The company intends to sell each unit for ¢219 and has estimated that it will have to pay ¢45 per unit for raw materials. One unit of raw material is needed for each unit of finished product.

All sales and purchases of raw materials are on credit. Debtors are allowed two month’s credit and suppliers of raw materials are paid after one month’s credit.

The wages, variable overheads and fixed overheads are paid in the month in which they are incurred.

Cash from a loan secured on the Land and Buildings of ¢120,000 at an interest rate of 7.5% is due to be received on 1^st May. Machinery costing ¢112,000 will be received in May and paid for in June.

The loan interest is payable half yearly from September onwards. An interim dividend of ¢0.025 per share will be paid in June.

Depreciation for the four months, including that on the new machinery is:

            Machinery and equipment ¢15,733

            Motor vehicle ¢3,500

The company uses the FIFO method of Stock valuation. Ignore Taxation.

Required: 

• Calculate and present raw materials budget and finished goods budget in terms of units, for each month from March to June inclusive.              
• Prepare the Sales budget, the budgeted closing debtors and stock of raw materials and finished goods in terms of value.                                           
• Prepare and present a cash budget for each of the four months.     
•