Flannel and Flounder Ltd's sales in November 2004 were $18 000 and in December 2004 were $17
Question:
Flannel and Flounder Ltd's sales in November 2004 were $18 000 and in December 2004 were $17 600. Of total sales revenue, 50% is on a cash basis, 40% is received one month after sale. Cash discount of 2 1/2% is allowed to customers who pay within one month. 10% of sales revenue is received two months after sale.
The company sold plant and equipment for $12 000 in February 2005. The balance at bank on 31 December 2004 was $31 750.
Required
(a) Prepare Flannel and Flounder Ltd's cash budget for the six months ending June 2005. Make all calculations to the nearest $.
(b) State the amount of Flannel and Flounder Ltd's trade debtors and creditors, and expense creditors at 30 June 2005.
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a To prepare the cash budget we need to take into account the cash inflows and outflows for each month Lets break down the information and calculation...View the full answer
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