The following information has been provided regarding the expected activity for Ironman plc for the second...

Transcribed Image Text:

The following information has been provided regarding the expected activity for Ironman plc for the second half of its financial year which ends in September 2022: ● ● ● ● ● ● ● ● Monthly sales of £2,500,000, of which 50% are for cash, and 50% on credit paid two months after the sales occurred. Monthly sales in the first semester were £1,750,000; Purchases represent 45% of the month's sales, and are due in 60 days; Salaries are paid monthly in the amount of £900,000; Quarterly rent of £220,000 is paid on the first month of each quarter; Other monthly expenses (paid in cash) total £200,000; The company is looking to expand and has hired a management consultant to look at strategic alternatives for the first three months of the second half. Although variable, Ironman predicts a minimum monthly payment of £125,000 per month paid on the month after being incurred; There is an outstanding payment of £175,000 for office equipment, which is due in May; The cash balance at the end of March 2016 is expected to be £250,000. a) Prepare a monthly cash flow forecast for the second six months of Ironman's financial year. (16 marks) The following information has been provided regarding the expected activity for Ironman plc for the second half of its financial year which ends in September 2022: ● ● ● ● ● ● ● ● Monthly sales of £2,500,000, of which 50% are for cash, and 50% on credit paid two months after the sales occurred. Monthly sales in the first semester were £1,750,000; Purchases represent 45% of the month's sales, and are due in 60 days; Salaries are paid monthly in the amount of £900,000; Quarterly rent of £220,000 is paid on the first month of each quarter; Other monthly expenses (paid in cash) total £200,000; The company is looking to expand and has hired a management consultant to look at strategic alternatives for the first three months of the second half. Although variable, Ironman predicts a minimum monthly payment of £125,000 per month paid on the month after being incurred; There is an outstanding payment of £175,000 for office equipment, which is due in May; The cash balance at the end of March 2016 is expected to be £250,000. a) Prepare a monthly cash flow forecast for the second six months of Ironman's financial year. (16 marks)

Answer rating: 100% (QA)

Particulars Beginning balance of cash Cash collections Cash sales Ironman Plc Cash Budget for the si... View the full answer