Question
The following information has been extracted from the budget files of Belle Ltd. for the period commencing in Jan and to June 2020. Month Sales
The following information has been extracted from the budget files of Belle Ltd. for the period commencing in Jan and to June 2020.
Month
Sales
Purchases
Wages
Overheads
Jan
75,000
35,000
10,000
10,000
Feb
80,000
60,000
10,000
12,000
March
100,000
78,000
12,000
15,000
April
90,000
75,000
12,000
10,000
May
95,000
60,000
12,000
12,000
June
75,000
62,000
10,000
15,000
Additional information
- 40% of sales will be for cash with the remainder being credit sales. Credit sales payments are received one month after they are made.
- All purchases will be paid one month in arrears.
- Overheads will be paid in the month incurred.
- Wages will be paid 50% in the month incurred and 50% one month later
- Dividend of 50,000 will be paid in May 2020
- The cash balance at the 1stMarch 2020 is expected to be 20,000.
- The company intends to purchase and pay for a new piece of equipment in May 2020 at a cost of 25,000.
You are required to:
a cash budget for Belle Ltd for each of the four months March-June 2020, detailing cash flows for each month and in total for the period.
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Financial and Managerial Accounting
Authors: Horngren, Harrison, Oliver
3rd Edition
978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978
