From the following details of a company, prepare its Cash Budget for 3 months that ended...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
From the following details of a company, prepare its Cash Budget for 3 months that ended on 30 September 2008: a. Balance on 30 June 2008: Cash in hand and at bank-Rs. 13,000; Debtors-Rs. 1,80,000 (Rs. 1,00,000 for sales in May and Rs. 80,000 for sales in June); Creditors-Rs. 65,000 (for purchases in June); Stock in trade-Rs. 45,000. b. Budgeted Sales: July-Rs. 1,00,000; August-Rs. 1,20,000; September-Rs. 1,40,000. c. All sales are at a profit of 25% on cost (being cost of goods sold only). d. Debtors: Credit allowed-2 months; 50% of credit allowed is expected to be received on time, balance in the subsequent month. e. Creditors: Credit received-1 month. f. Time lag: Wages-1/2 month; Other Expenses-1/4 month. g. Stock level to be raised to Rs. 50,000 in July and to Rs. 55,000 in August. h. Actual and Budgeted Wages: June-Rs. 8,000 (actual); July-Rs. 9,000; August-Rs. 9,000; September-Rs. 10,000. i. Actual and Budgeted Expenses: June-Rs. 6,000 (actual); July-Rs. 6,000; August-Rs. 5,000; September-Rs. 7,000. j. Advance Income Tax in September-Rs. 7,000 and Purchase of machinery in August-Rs. 10,000. k. 10% of Total Sales and 20% of Total Purchases are on cash basis. Ans: Closing Cash Balance: July-Rs. 23,500; August-Rs. 34,700; September-Rs. 60,400. From the following details of a company, prepare its Cash Budget for 3 months that ended on 30 September 2008: a. Balance on 30 June 2008: Cash in hand and at bank-Rs. 13,000; Debtors-Rs. 1,80,000 (Rs. 1,00,000 for sales in May and Rs. 80,000 for sales in June); Creditors-Rs. 65,000 (for purchases in June); Stock in trade-Rs. 45,000. b. Budgeted Sales: July-Rs. 1,00,000; August-Rs. 1,20,000; September-Rs. 1,40,000. c. All sales are at a profit of 25% on cost (being cost of goods sold only). d. Debtors: Credit allowed-2 months; 50% of credit allowed is expected to be received on time, balance in the subsequent month. e. Creditors: Credit received-1 month. f. Time lag: Wages-1/2 month; Other Expenses-1/4 month. g. Stock level to be raised to Rs. 50,000 in July and to Rs. 55,000 in August. h. Actual and Budgeted Wages: June-Rs. 8,000 (actual); July-Rs. 9,000; August-Rs. 9,000; September-Rs. 10,000. i. Actual and Budgeted Expenses: June-Rs. 6,000 (actual); July-Rs. 6,000; August-Rs. 5,000; September-Rs. 7,000. j. Advance Income Tax in September-Rs. 7,000 and Purchase of machinery in August-Rs. 10,000. k. 10% of Total Sales and 20% of Total Purchases are on cash basis. Ans: Closing Cash Balance: July-Rs. 23,500; August-Rs. 34,700; September-Rs. 60,400.
Expert Answer:
Answer rating: 100% (QA)
Answer The cash budget for the company for the 3 months ended 30 September 2008 is as follows June O... View the full answer
Related Book For
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas
Posted Date:
Students also viewed these accounting questions
-
Calculate the change in boiling point for 0.150m... This is for easier access Incorrect Question 8 Calculate the change in boiling point for 0.150 m Na3PO4 (Kb = 0.512C/m for water) ATbp = Kbp...
-
Capers, Inc. is developing its cash budget for the next year. Of Capers's 2019 sales, 20% is for cash, another 60% is collected in the month following sale, and 20% is collected in the second month...
-
Quail Industries is preparing its cash budget for the third quarter of the current year. Sales for the third quarter are budgeted at $696,000 ($232,000 per month). Sales are 80% cash, with the...
-
Show that the sum of the squares of the distances from a point P = (c, d) to n fixed points (a 1 , b 1 ), . . . ,(a n , b n ) is minimized when c is the average of the x-coordinates a i and d is the...
-
With respect to the element of intention, explain how the courts treatment of domestic agreements differs from their response to commercial transactions when the question of intention arises.
-
A 1-mm diameter-long electrical wire submerged in water at atmospheric pressure is dissipating 4100 W/m of heat, and the surface temperature reaches 128C. If the experimental constant that depends on...
-
What are opportunity costs? Why are they important to managers? What is the opportunity cost of not investing in environmental protection? Provide an example to support your answer.
-
Wonder Bakery manufactures two types of bread, which it sells as wholesale products to various specialty retail bakeries. Each loaf of bread requires a three-step process. The first step is mixing....
-
Dr. Chiang helped XYZ company optimize its production decision to maximize the firm's profit. His solver reports are provided below. Please use these reports to answer the following questions....
-
James Henderson is the president of York Athletics, a producer of hats and jerseys and other accessories for fans of several professional sports teams. Imagine you are the accountant in charge of all...
-
National Co.' operating income (EBIT) is P500,000. The company's tax rate is 25 percent, and its operating cash flow is P230,000. The company's interest expense is P100,000. What is the company's net...
-
Explain the concept of competitive balance. How have leagues attempted to achieve competitive balance?
-
How does location affect the costs of a stadium or arena project? What are the pros and cons of locating a stadium downtown versus out near a highway?
-
Why have so many rival professional sport leagues failed in the United States?
-
Explain the concept of pooled debt instruments.
-
Give examples of how a sport franchise can use related-party transactions to reduce its net income. For each example, how does it reduce net income?
-
Explain the types of price elasticity of demand and supply.
-
What exactly is a prima facie duty? How does an ethic of prima facie duties differ from monistic and absolutist ethical theories?
-
Hopter Khan (HK) owns vast amounts of corporate bonds. Suppose HK buys $1,100,000 of Tyconix bonds at a price of 104. The Tyconix bonds pay cash interest at the annual rate of 6% and mature at the...
-
The Beemer Books Company accounting records include the following for 2010 (in thousands): Other revenues............................................................................. $ 2,100 Income...
-
The accounting (not the income tax) records of Crowley Publications, Inc., provide the comparative income statement for 2010 and 2011, respectively: Taxable income for 2010 includes these...
-
Does statelessness exist in wealthy countries such as the United States? How does the status of the "Dreamers" (people who entered the United States illegally as young children) compare with that of...
-
What are the main characteristics of the various systems of social differentiation within egalitarian and rank societies?
-
How does political organization relate to social differentiation?
Study smarter with the SolutionInn App