Kaume Enterprises (KE) is a business that sells sweets. The company buys the sweets from producers...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kaume Enterprises ("KE") is a business that sells sweets. The company buys the sweets from producers and then packages them into small assorted packs. The business has gained popularity due to its assorted sweets that customers are not able to get such mixes elsewhere. KE is in the process of preparing budgets for the first quarter of 2024 and the following information has been made available. 1. The cash balance on 1st January 2024 is expected to amount to N$14 000. 2. Budgeted monthly sales units for the first four months of 2023 are as follows: Month January February March April Units (packets) 12 000 18 000 15 000 14 000 3. KE will charge each packet of sweets for N$5 for January rising to N$7 in March 2024. Sales are 30% cash and 70% credit. Credit sales are collected over a three-month period, 10% in the month of sale, 60% in the month following the sale and 30% in the second month following the sale. Total sales revenue in November 2024 and December 2024 amounts to N$45 000 and N$54 000 respectively. 4. Cost of sales is expected to be 75% of sales revenue each month. 5. The business maintains its closing inventory levels at 60% of the following month's cost of sales. Inventory at the beginning of January is expected to amount to N$27 000. 6. 65% of inventory purchased is paid for in the month of purchase and the remaining 35% is paid for in the month following purchase. At the 31st December 2023 amounts owed for purchases were N$13 800. 7. A loan of N$40 000 is expected to be received in January 2024. The company will repay this loan evenly over 20 months commencing in February. 8. A motor vehicle which cost N$8 000 when purchased second hand three years ago is expected to be sold in March 2024 for N$3 300. The expenses associated with this sale are expected to be N$300. 9. Equipment costing N$12 000 will be purchased in January 2024 and paid for in February. This equipment will be depreciated on a straight-line basis over three years. 10. Operating expenses are paid as incurred. These have been estimated as follows: January February March 12 800 18 900 14 000 The above figures include depreciation on existing assets (excluding planned purchases/disposals detailed above) of N$2 000 per month. Required 2.1 2.2 Prepare a monthly cash budget for January, February and March 2023. Outline any one potential benefits to KE from the preparation of the cash budget 2.3 Total Calculate the purchases requirement for each month from January 2023 to March 2023. Marks 6 13 1 20 Kaume Enterprises ("KE") is a business that sells sweets. The company buys the sweets from producers and then packages them into small assorted packs. The business has gained popularity due to its assorted sweets that customers are not able to get such mixes elsewhere. KE is in the process of preparing budgets for the first quarter of 2024 and the following information has been made available. 1. The cash balance on 1st January 2024 is expected to amount to N$14 000. 2. Budgeted monthly sales units for the first four months of 2023 are as follows: Month January February March April Units (packets) 12 000 18 000 15 000 14 000 3. KE will charge each packet of sweets for N$5 for January rising to N$7 in March 2024. Sales are 30% cash and 70% credit. Credit sales are collected over a three-month period, 10% in the month of sale, 60% in the month following the sale and 30% in the second month following the sale. Total sales revenue in November 2024 and December 2024 amounts to N$45 000 and N$54 000 respectively. 4. Cost of sales is expected to be 75% of sales revenue each month. 5. The business maintains its closing inventory levels at 60% of the following month's cost of sales. Inventory at the beginning of January is expected to amount to N$27 000. 6. 65% of inventory purchased is paid for in the month of purchase and the remaining 35% is paid for in the month following purchase. At the 31st December 2023 amounts owed for purchases were N$13 800. 7. A loan of N$40 000 is expected to be received in January 2024. The company will repay this loan evenly over 20 months commencing in February. 8. A motor vehicle which cost N$8 000 when purchased second hand three years ago is expected to be sold in March 2024 for N$3 300. The expenses associated with this sale are expected to be N$300. 9. Equipment costing N$12 000 will be purchased in January 2024 and paid for in February. This equipment will be depreciated on a straight-line basis over three years. 10. Operating expenses are paid as incurred. These have been estimated as follows: January February March 12 800 18 900 14 000 The above figures include depreciation on existing assets (excluding planned purchases/disposals detailed above) of N$2 000 per month. Required 2.1 2.2 Prepare a monthly cash budget for January, February and March 2023. Outline any one potential benefits to KE from the preparation of the cash budget 2.3 Total Calculate the purchases requirement for each month from January 2023 to March 2023. Marks 6 13 1 20
Expert Answer:
Answer rating: 100% (QA)
Lets go through the required calculations and prepare the cash budget for Kaume Enterprises KE step by step 21 Calculate the purchases requirement for each month from January 2023 to March 2023 To cal... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 9781260306743
7th Edition
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod Dick
Posted Date:
Students also viewed these accounting questions
-
Thomas Halabi is a financial executive with Sandhill Enterprises. Although Thomas has not had any formal training in finance or accounting, he has a good sense for numbers and has helped the company...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Your independent film production company owns the rights to a script for a rom-com movie. They estimate that the script would cost $30 million to make into a movie, which would have a 35% chance of...
-
Electrons are accelerated by 2450 V in an electron microscope. What is the maximum possible resolution?
-
Glory Enterprises quality control report for August contains the following items: Liability costs associated with defective products Disposal costs of defective products failing inspection Disposal...
-
Understand and describe common medical errors and how they lead to litigation.
-
Spangler Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31, 2012: Customer Amount Will Boyette ..... $10,000 Stan Frey...
-
Discussions and case questions: The case discusses the reasons for the failure of the Danone milk business in India. Was pricing the most dominant factor behind the exit of Danone from India?...
-
Consider the following fragment of assembly language that is to be executed on a generic three way superscalar processor that can accommodate one memory access per clock. Rewrite the code to improve...
-
Which of the following is NOT a function of vitamin C? Select one alternative: O Vitamin C is concentrated in the adrenal glands and is released into the blood along with hormones. O The recycling of...
-
Figure 7.43 shows a stored procedure, UpdateStudent. Develop and build a new project, OracleUpdateStudent, and add code into the Update button event handler on the StudentFrame form class to call...
-
By setting the Concurrency Type property as UpdaTable to a ResultSet object, that ResultSet object can be used to perform data insert, update and delete actions to a database. (True/False)
-
A CallableStatement can either return a object and multiple ResultSet objects by using the executeQuery() method or return nothing by using the method. a. ResultSetMetaData, getResultSet() b. Cursor,...
-
By using which of the following static constant values can we set an UpdaTable Result object that has a cursor that can move either forward or backward? a. ResultSet.TYPE_FORWARD_ONLY b....
-
Choose the best statement. A. A subsidy to peanut growers lowers peanut growers costs, lowers the market price of peanuts, and increases the demand for peanuts. B. A price support for peanut growers...
-
Write a query to create primary constraints with table level with naming convention.
-
APC16550D UART has a clock running at18.432 MHz and its baud rate is set to 2000.Determine the HEX contents of its DLM and DLL registers. Please can you explain step by step and in detail how you get...
-
Love Your Pet, Inc. (LPI) is a pet food company located in rural Quebec. LPI has been operating for years as a distributor of pet food but in the last year has begun to manufacture raw dog food. In...
-
Identify whether the following items in comprehensive income will be reclassified to net income or not reclassified. Reclassifled Not Reclassifled 1. FVOCI financial asset 2. Foreign currency...
-
DesRosier Company acquires a machine on 1 January 20X6, with a non-interest-bearing note that requires $10,000 to be paid on 31 December 20X6 and again on 31 December 20X7. The note has no explicit...
-
What would the QA/QC planning grid (see Figure 12. 6) look like for a project you have been involved in? Data from Figure 12. 6 Table 12.6 QA/QC planning grid, with examples Quality assurance...
-
Why is the definition of quality critical to the success and acceptance of a project?
-
What is the purpose of the Quality Management Plan?
Study smarter with the SolutionInn App