Al Raha trading company wishes to prepare cash budget from January. Prepare cash budget for the first
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Al Raha trading company wishes to prepare cash budget from January. Prepare cash budget for the first six months from the following estimates and expenses:
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Month Total Sales (OMR) January 10,000 February 11,000 March 14,000 18,000 15,000 20,000 April May June Purchase Wages (OMR) (OMR) 2. 3. 10,000 7,000 7,000 11,000 10,000 12,500 2,000 2,200 2,300 2,300 2,000 2,500 Production overheads(OMR) 1,600 1,650 1,700 1,750 1,600 1,800 Selling and distribution overheads (OMR) 400 450 450 500 450 600 Additional information: 1. Cash balance on 1st January was OMR 5000. A new machinery is to be installed at OMR 10,000 on credit, to be repaid by two equal installments in march and April. Assume that cash sales to be 50% of total sales. OMR 5000 being the amount of 2nd call may be received in march. Share premium amounting to OMR 1000 is also obtainable with the 2nd call. Period of credit allowed by suppliers is two months. 5. Period of credit allowed to customer is one month. 4. 6. There is a delay in payments of overheads by one month 7. There is a delay in payments of wages by ½ month 8. Sales commission @ 5% on total sales is to be paid within a month of following actual sales. Month Total Sales (OMR) January 10,000 February 11,000 March 14,000 18,000 15,000 20,000 April May June Purchase Wages (OMR) (OMR) 2. 3. 10,000 7,000 7,000 11,000 10,000 12,500 2,000 2,200 2,300 2,300 2,000 2,500 Production overheads(OMR) 1,600 1,650 1,700 1,750 1,600 1,800 Selling and distribution overheads (OMR) 400 450 450 500 450 600 Additional information: 1. Cash balance on 1st January was OMR 5000. A new machinery is to be installed at OMR 10,000 on credit, to be repaid by two equal installments in march and April. Assume that cash sales to be 50% of total sales. OMR 5000 being the amount of 2nd call may be received in march. Share premium amounting to OMR 1000 is also obtainable with the 2nd call. Period of credit allowed by suppliers is two months. 5. Period of credit allowed to customer is one month. 4. 6. There is a delay in payments of overheads by one month 7. There is a delay in payments of wages by ½ month 8. Sales commission @ 5% on total sales is to be paid within a month of following actual sales.
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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