Kashi is preparing the cash budget for the first 3 months of her business's trading. Business...

 

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Kashi is preparing the cash budget for the first 3 months of her business's trading. Business is called Kashi textiles and Kashi will be investing £25,000 of her personal savings to get it started. Rest of the information is as follows: a. In January 2022, Kashi will purchase a computer and a printer for use in the business for £1,980, payable upfront. b. Kashi expects to sell the following textiles: January £4,500 to Moon Traders February £6,890 to Hans Traders March £5,670 to Down Town shops. c. Kashi expects to make the following purchases of textiles over the next three months: £3,280 for Moon Traders supplies £5,120 for Hans Traders supplies £4,100 for Down Town shops' supplies January February March d. All sales will be made for cash. e. Purchases: 10% payment in the same month, 50% payment next month and remaining payment in 2 months' time. f. Kashi will need to hire a printing machine to print her logos and the hiring charges will be £250 per month, payable in the same month. Hiring will be made in January and will be needed for all the subsequent trading months. g. Kashi has agreed to pay £250 per month to an accountant for his advice and preparation of accounts. h. Other expenses have been estimated as follows: £100 on delivery costs per month, payable at the end of each month. £425 on telephone costs per quarter, payable at the end of the quarter. £250 on other expenses, such as electricity and insurance, payable at the end of each month. i. Kashi will be withdrawing £700 per month to cover her personal expenses. Prepare the cash budget for Kashi textiles for first 3 months' of trading from January to March, 2022.Show your workings separately. (25 Marks) Kashi is preparing the cash budget for the first 3 months of her business's trading. Business is called Kashi textiles and Kashi will be investing £25,000 of her personal savings to get it started. Rest of the information is as follows: a. In January 2022, Kashi will purchase a computer and a printer for use in the business for £1,980, payable upfront. b. Kashi expects to sell the following textiles: January £4,500 to Moon Traders February £6,890 to Hans Traders March £5,670 to Down Town shops. c. Kashi expects to make the following purchases of textiles over the next three months: £3,280 for Moon Traders supplies £5,120 for Hans Traders supplies £4,100 for Down Town shops' supplies January February March d. All sales will be made for cash. e. Purchases: 10% payment in the same month, 50% payment next month and remaining payment in 2 months' time. f. Kashi will need to hire a printing machine to print her logos and the hiring charges will be £250 per month, payable in the same month. Hiring will be made in January and will be needed for all the subsequent trading months. g. Kashi has agreed to pay £250 per month to an accountant for his advice and preparation of accounts. h. Other expenses have been estimated as follows: £100 on delivery costs per month, payable at the end of each month. £425 on telephone costs per quarter, payable at the end of the quarter. £250 on other expenses, such as electricity and insurance, payable at the end of each month. i. Kashi will be withdrawing £700 per month to cover her personal expenses. Prepare the cash budget for Kashi textiles for first 3 months' of trading from January to March, 2022.Show your workings separately. (25 Marks)

Answer rating: 100% (QA)

The cash budget is tabulated below January February March Opening cash balance 0 25642 28830 ... View the full answer