Describe the major practical differences between a cash budget and other

budgets within a business's budgetary control system. (4 marks)

b) The following information relates to Whyzee Limited in 2017 and comes from

its various budgets, management decisions, activities and expectations during

the year:

? It has agreed to buy new machinery in July for 200,000 and a finance

arrangement to pay for it in 5 equal monthly instalments, the first due on

the date of purchase.

? The machinery attracts a government grant worth 15% of its purchase

price, on evidence that the machinery instalments are being made on

time. This is expected in 3 equal monthly instalments from August.

? Rent payable for their premises is 24,000 per year, payable quarterly in

advance. The next payment is due in July.

? Purchases of Raw Materials are budgeted to be 10,000 per month with

a variety of payment terms, but averages out as 40% is paid in the

current month and 60% in the month afterwards.

? Other overheads and expenses are budgeted in each month, as follows:

- Wages of 5,000, payable in the month earned

- Depreciation of 150 in July, and 450 in each following month,

applied in the relevant month

- Electricity, Water and Gas usage of 1,350 each month settled

monthly

- Administration costs of 5% of each months' receipts from sales, and

paid in the following month.

? Cash sales are treated as fully paid at the time of purchase and Whyzee

Ltd.'s standard credit term for its customers is full payment by the end

of the following month. The pattern of sales is expected to be:

May June July August September October

Cash

Sales 12,000 14,000 16,000 18,000 20,000 22,000

Credit

Sales 25,000 26,000 27,000 28,000 29,000 30,000

Monthly

Sales 37,000 40,000 43,000 46,000 49,000 52,000

The bank balance on 30 June is budgeted to be 25,000 (in funds). An

overdraft fee of 20 is charged when any end-of-month bank balance is

overdrawn, and any end-of-month positive bank balance (that is, it is not

overdrawn) attracts 1% interest. Bank fees and interest, where arising,

are applied in the following month.

TASK for part b)

Using the information given above relating to Whyzee Limited, prepare their

cash budget for the four months from July to October 2017.

I need to come up with a 5-year budget that supports the entrepreneur's vision and strategy and needs for equipment labor and other startup costs.

Business: a landscaping company

To do: Executive Summary (a written budget proposal), a supporting Excel Workbook showing your calculations

Business Profile: The Cutting Edge Landscaping

The vision of the entrepreneur is to come up with5-team landscaping business that caters to upscale neighborhoods in Miami, Florida. The company is to be called "The Cutting Edge".The entrepreneur's goal is to generate income of at least $42,000 per year as his personal salary and profits of 4% after-tax sometime no later than the second year of operation.The entrepreneur intends to buy a route of 100 homes from a lawn service company whose owner is retiring.

Strategy

a) Market Focus/Analysis

The landscaping business targets upscale neighborhoods with home associations that demand lawns to be manicured and well-cared for.Customers tend to be upper-middle, upper-class individuals with household income levels of $110,000 or more.The geographic focus is Miami and its surrounding area. The area is expected to show slow economic growth of about 1% per year over the next five years.

b) Product

The product is lawn maintenance and landscaping services as well as minor irrigation equipment repair.The primary source of income is expected to be in the form of lawn-cutting, debris-blowing, and hedge trimming services. However, the company will also do reseeding, landscaping, and foliage/tree planting, tree trimming, and light irrigation system repair when necessary to keep their customer's lawns watered and healthy.

c) Basis of Competition

Customers hire the Cutting Edge due to its reliability in showing up when they are supposed to, quality lawn service, as well as their ability to keep lawn sprinkler systems in good repair, sparing the homeowner of the inconvenience of calling a sprinkler repair for minor repairs such as broken or clogged sprinkler heads, or other minor sprinkler system repairs.

Startup Requirements*

Given Costs

The cost of registering a Limited Liability Company in Florida, filing fees listed at the bottom of the application form located at http://form.sunbiz.org/pdf/cr2e047.pdf

Business Insurance, estimated at $1000 per year

No health benefits except for the owner of the business

Workman's compensation fees

The cost of the initial route of 100 homes, for $120,000

Costs you should estimate through research, experience, or other methods

? Team equipment for lawn cutting, which includes equipment for a two-person team:

? A pickup truck

? A trailer

? A large riding lawnmower

? A smaller riding lawnmower

? A push lawn-mower

? Two gas-powered lawn-trimmers

? Two gas-powered lawn edgers

? Safety equipment for eyes and ear protection

? Tools for minor equipment repair on the job

? A drink cooler

? 2 gas-powered blowers

? 2 tree/hedge trimmers

? 2 long ladder

? Buck Saws for cutting branches

? The cost of 10 workers, two per team

? All operating costs such as advertising, phone, a small 400 square foot office complete with utilities, internet a laptop computer, and accounting software like QuickBooks, as well as office supplies, and annual depreciation on equipment.

*if you have questions about startup requirements, or think other startup costs that are necessary for the business are missing, then make an assumption and state it in the relevant section of the report. This list is not necessarily complete.

Given Financial Assumptions*

? The owner will be granted a loan for the initial startup, repayable over 10 years at current interest rates for small business loans

? The owner will use personal funds to operate the business until it generates enough cash flow to fund itself.

? Essentially, 60% of sales are made by credit card, and 40% are made by check. All credit card sales are paid to the restaurant daily by the credit card company.

? 2.5% of sales is paid to a credit card company in fees

? The average lawn service costs $150 per month. Irrigation repairs are minimal at an average of $50 per customer per year, landscaping and other services are about $200 per customer per year.

? Equipment is depreciated on a straight-line basis over 5 years

? The owner has health benefits, other workers do not.

? Each lawn takes about 1.5 hours to cut and manicure, as well as any other repairs or extra services like a tree or shrub trimming.

? The entrepreneur will manage the company and draw a salary, but will not service lawns or perform other services.

*If you believe any other assumptions are necessary, then please state them in your budget proposal

Question # 6: Given below are the statement of comprehensive income and statement of financial position of HP Itd. for the year ended December 31, 2007. Statement of Comprehensive Income For the year ended December 31, 2007 Sales 1,200 Cost of sales (500) Gross profit 700 Administrative expenses (360) Interest expense Depreciation expense Interest income Dividend income Gain on sale of shares Profit before taxation Income tax expense Net profit after tax Statement of Financial Position As on December 31, 2007 2007 2006 Cash 135 Trade receivables 301F19.14 (LO 3) The following information is available for Patel Lid. Prepa January 1, 2020 Raw materials inventory 2020 Rs210.000 December 31, 2020 d par S Work in process inventory 135,000 R$300.000 Finished goods inventory 270,000 172,000 Materials purchased 210,000 Direct labor Rs1,500,000 2,200,000 Manufacturing overhead 1.800,000 Sales revenue 9,100,000 Instructions a. Compute cost of goods manufactured. b. Prepare an income statement through gross profit. c. Show the presentation of the ending inventories on the December 31, 2020, statement of financial position. d. How would the income statement and statement of financial position of a merchandising company be different from Patel's financial statements?3.. Prepare a statement of nancial position for Jorge Semprun Inc. company at the end of 2020 by using following accounts: Accounts Payable: 19.000 Accounts Receivables: 3.000 Accrued expenses: 700 Accumulated Depreciation: 500 Cash: 49.600 Common Stock: 50000 Inventory 18.800 Prepaid Rent: 750 Renovation and Improvements: 25.000 Retained Earnings: 6550 Unearned Income: 9.000 Question one (3) Explain the nature of management and state its purpose the (3 marks) (b) List four differences between financial and management accounting (3 marks) (c) Define cost and explain the elements of cost. Give one example for each cost element. 13 marksits (d) What is a cost unit? Give five examples of cost units (3 marks) (e) What i : you understand by cost object? nive two examples of cost object. (3 marks) (f) why is material costing important in management accounting? (279 marks) (g) Why is labour costing important in management accounting (2%% marks) (Total 20 marks)