The opening cash balance on 1 January is expected to be K60, 000. The following information...

 

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The opening cash balance on 1" January is expected to be K60, 000. The following information is provided-: MONTH NOV DEC JAN FEB MAR Budgeted sales 80,000 90,000 75,000 V 75,000 80,000 Budgeted Purchases 50,000 60,000 55,000 45,000 55,000 1. Accounts receivables will settle their accounts as follows -: 60% within the month of sale, 25% the following month, 15% in the third month. 2. Credit facilities with suppliers-: 90% to be settled in the month of purchase and the balance the month after. 3. Wages are K15, 000 per month. K 4. Overheads of K20, 000, which include depreciation of K5, 000 are settled monthly 5. Taxation of K28, 000 must be settled in February. 6. The Company will receive a donor Grant of K15, 000 in March. V REQUIRED: a) Prepare a Cash Budget for the months of January, February and March. (15 marks) b) Provide comments based on the results obtained from (a) above. (5 marks) The opening cash balance on 1" January is expected to be K60, 000. The following information is provided-: MONTH NOV DEC JAN FEB MAR Budgeted sales 80,000 90,000 75,000 V 75,000 80,000 Budgeted Purchases 50,000 60,000 55,000 45,000 55,000 1. Accounts receivables will settle their accounts as follows -: 60% within the month of sale, 25% the following month, 15% in the third month. 2. Credit facilities with suppliers-: 90% to be settled in the month of purchase and the balance the month after. 3. Wages are K15, 000 per month. K 4. Overheads of K20, 000, which include depreciation of K5, 000 are settled monthly 5. Taxation of K28, 000 must be settled in February. 6. The Company will receive a donor Grant of K15, 000 in March. V REQUIRED: a) Prepare a Cash Budget for the months of January, February and March. (15 marks) b) Provide comments based on the results obtained from (a) above. (5 marks)

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a Cash budget of JAN Budgeted sales is 7500060 25 of 90000 15 of 80000 79500 Bud... View the full answer