Selena Jordan has decided to set up her own cookery business in Kilkenny selling two types...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Selena Jordan has decided to set up her own cookery business in Kilkenny selling two types of chocolate dripping cakes, Kinder Bueno chocolate drip and Curly Wurly chocolate drip. Selena hopes to commence production in June 2021. She has € 5,000 of savings to use in the business but will require additional bank funding to get the business started. Selena has prepared the following relating to her business: Estimated Sales Demand Number of Cakes June July August September October Kinder Bueno Chocolate Drip Curly Wurly Chocolate Drip 1,000 1,500 1,600 1,800 2,000 1,500 1,650 1,800 2,200 2,100 Selena has obtained orders from a hotel that specialises in arranging conferences and events. She also has orders from local restaurants and coffee shops. She estimates that 30 % of her customers will pay cash immediately and has agreed to give one month's credit to the remaining customers. 1. The Kinder Bueno chocolate drip cake will have a selling price of €75.00 each while the Curly Wurly chocolate drip cake will sell for €80.00 cach for the first thrce months. She intends to increase both prices by 10 % after that time. 2. The cakes are made using this same basic ingredient but with different toppings. Selena has calculated that for each variety of cake, the basic ingredient is 20 % of selling price while the cost of the topping is 8 %% of the selling price. 4. Selena will receive a grant amounting to €5,100, paid in two equal instalments, June 2021 and September 2021. 5. She will need to purchase and pay for equipment in June costing €4,800. The equipment is expected to last for 4 years and will have no scrap value. 6. Selena has found suitable premises, which will cost €1,200 per month to rent. The landlord requires one month's rent as a deposit and this must be paid with the first month's rent. 7. Other operating expenditure includes power, packaging, insurance, administration expenses amounting to €3,000 per annum spread evenly over the year. This includes monthly depreciation of €100. 8. Selena will employ two staff in the business and will pay wages of E1,320 each per month. The relevant costs are paid in the month in which they are incurred. Required a) Prepare a cash budget in June for the 5 months commencing 1" June 2021. (30 marks) b) Comment briefly on Selena's cash flow for the first 5 months. (3.33 marks) (Total 33.33 marks) Selena Jordan has decided to set up her own cookery business in Kilkenny selling two types of chocolate dripping cakes, Kinder Bueno chocolate drip and Curly Wurly chocolate drip. Selena hopes to commence production in June 2021. She has € 5,000 of savings to use in the business but will require additional bank funding to get the business started. Selena has prepared the following relating to her business: Estimated Sales Demand Number of Cakes June July August September October Kinder Bueno Chocolate Drip Curly Wurly Chocolate Drip 1,000 1,500 1,600 1,800 2,000 1,500 1,650 1,800 2,200 2,100 Selena has obtained orders from a hotel that specialises in arranging conferences and events. She also has orders from local restaurants and coffee shops. She estimates that 30 % of her customers will pay cash immediately and has agreed to give one month's credit to the remaining customers. 1. The Kinder Bueno chocolate drip cake will have a selling price of €75.00 each while the Curly Wurly chocolate drip cake will sell for €80.00 cach for the first thrce months. She intends to increase both prices by 10 % after that time. 2. The cakes are made using this same basic ingredient but with different toppings. Selena has calculated that for each variety of cake, the basic ingredient is 20 % of selling price while the cost of the topping is 8 %% of the selling price. 4. Selena will receive a grant amounting to €5,100, paid in two equal instalments, June 2021 and September 2021. 5. She will need to purchase and pay for equipment in June costing €4,800. The equipment is expected to last for 4 years and will have no scrap value. 6. Selena has found suitable premises, which will cost €1,200 per month to rent. The landlord requires one month's rent as a deposit and this must be paid with the first month's rent. 7. Other operating expenditure includes power, packaging, insurance, administration expenses amounting to €3,000 per annum spread evenly over the year. This includes monthly depreciation of €100. 8. Selena will employ two staff in the business and will pay wages of E1,320 each per month. The relevant costs are paid in the month in which they are incurred. Required a) Prepare a cash budget in June for the 5 months commencing 1" June 2021. (30 marks) b) Comment briefly on Selena's cash flow for the first 5 months. (3.33 marks) (Total 33.33 marks)
Expert Answer:
Answer rating: 100% (QA)
Cash Budget Jule July August September October Beginning cash balance 5000 40460 187760 364100 56992... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The owner of Jake's Hardware Supply has decided to set up a petty cash fund for small purchases. On July 1, a cheque for $500 was issued to establish the fund. On July 31, the fund had $305...
-
A young couple has decided to set aside some money to fund their 5-year-old daughter's college education. They want to deposit the sum in an account that earns 8% compounded continuously. Beginning...
-
Toyota has decided to set up regional warehouses where some variants of the Scion will be customized and shipped to dealers on demand. Customizing and shipping on demand will raise production and...
-
Suppose that we want to know the mass of gasoline in an automobile's gas tank. The tank has a volume of 70 L, and a handbook of fluid properties states that the density of gasoline is 736 kg/m. (1000...
-
Explain what is tested by the hypothesis test in equation. What conclusion should be reached if the null hypothesis is not rejected? What conclusion should be reached if the null hypothesis is...
-
The three Missouri plaintiffs owned Whispering Lane Kennel, a Missouri business that breeds and shows AKC dogs, especially the Chinese Crested breed. Defendants show and sell Chinese Crested dogs in...
-
The following are financial data taken from the 2015 annual report of Pfizer, Inc: Calculate the following ratios for 2015 and 2014: intangible asset turnover, fixed asset turnover, accumulated...
-
Phigam Steel purchases a machine on January 1 for $30,000. The machine has an estimated useful life of seven years, during which time it is expected to produce 114,800 units. Salvage value is...
-
Then evaluate the following information: Make a presentation (in Word, PowerPoint, Prezi, or any other tool) of how you would conduct an audit of new systems development for the IT department. Based...
-
Due to customer no-shows, The Inn at Penn hotel is considering implementing overbooking. Recall from Q16.1 that The Inn at Penn has 150 rooms, the full fare is $200, and the discount fare is $120....
-
J Corporation had a balance of $20,000 in accumulated E&P at the beginning of the year. Its current E&P for the year were $25,000. During the year, J made two distributions to its sole...
-
Completion Complete each statement. 1. Important to both VMware Server and Hyper-V users is making sure the host computer's OS is updated with the latest ____________________ patches. Short Answer 2....
-
An insurance company has liabilities consisting of eleven annual payments of 1 million, with the first payment due to be made in 10 years' time and the last payment due to be made in 20 years' time....
-
On January 1 , Year 6 , Robertson Company created a fixed compensatory stock option plan for employees to acquire 1 8 , 0 0 0 shares of $ 3 par common stock for $ 2 2 a share. The options vest after...
-
At present, the two most popular VPN technologies are the traditional Internet Protocol Security (IPsec)-based VPNs, which function primarily at the network layer, and Secure Sockets Layer (SSL)...
-
Suppose that Bob's utility function is uB(qB,mB) = mB. (a) What is Bob's optimal consumption bundle if his income is Y, the price of qB is pq and the price of mg is 1. Ann's utility function is the...
-
1 The Chinese Postman Tour: A mail carrier has to deliver mail in a small town with 9 streets and 5 intersections (vertices). The table below shows the distances (in miles) between the intersections....
-
Explain briefly what is meant by electronic data interchange (EDI). How does EDI affect a companys audit trail?
-
Wynn Resorts owns a variety of popular gaming resorts. Its annual report contained the following information: Debenture Conversions Our convertible debentures are currently convertible at each...
-
Matching Definitions with Terms Match each definition with its related term by entering the appropriate letter in the space provided. There should be only one definition per term (that is, there are...
-
Using Financial Reports: Analyzing the Effects of Adjustments Carey Land Company, a closely held corporation, invests in commercial rental properties. Careys annual accounting period ends on December...
-
An individual, perfectly competitive firm a. may increase its price without losing sales. b. is a price maker. c. has no perceptible influence on the market price. d. sells a product that is...
-
In a market with perfectly competitive firms, the market demand curve is ___ and the demand curve facing each firm is ___. a. upward sloping; horizontal b. downward sloping; horizontal c. horizontal;...
-
Describe and explain how the shape of the long-run supply curve depends on the extent to which input costs change with the entry or exit of firms in the industry.
Study smarter with the SolutionInn App