The Comet Ltd budgeted profit and loss statement disclose the followings: Sales $420,000 $630,000 $560,000 April...

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The Comet Ltd budgeted profit and loss statement disclose the followings: Sales $420,000 $630,000 $560,000 April May June Purchases $190,000 $250,000 $224,000 Expenses $74,000 $84,000 $80,000 (a)Sales are collected 65% in the month of sale, 20% in the following month of sale and 15% in the second following month of sale. No bad debts. (b) Comet pays purchases 75% in the month of sale and 25% in the following month of sale. (c) On 1 April, the accounts receivable balance was $360000, to be collected $240000 in April and the reminder in May. (d) Comet had $80000 accounts payable on 1 April. (e)Cash balance 1 April was $106000. (f) The expenses are paid for in the month incurred and included $14000 depreciation expense. Required: 1- Prepare a cash budget from April to June. (9 marks) 2- Will Comet Ltd have enough cash to buy a piece of equipment in July with the price of $110,000. (1 Mark) The Comet Ltd budgeted profit and loss statement disclose the followings: Sales $420,000 $630,000 $560,000 April May June Purchases $190,000 $250,000 $224,000 Expenses $74,000 $84,000 $80,000 (a)Sales are collected 65% in the month of sale, 20% in the following month of sale and 15% in the second following month of sale. No bad debts. (b) Comet pays purchases 75% in the month of sale and 25% in the following month of sale. (c) On 1 April, the accounts receivable balance was $360000, to be collected $240000 in April and the reminder in May. (d) Comet had $80000 accounts payable on 1 April. (e)Cash balance 1 April was $106000. (f) The expenses are paid for in the month incurred and included $14000 depreciation expense. Required: 1- Prepare a cash budget from April to June. (9 marks) 2- Will Comet Ltd have enough cash to buy a piece of equipment in July with the price of $110,000. (1 Mark)

Answer rating: 100% (QA)

here is the cash budget for Comet Ltd from April to June Month Cash receipts Cash payments Net cash flow April 279000 65 of 420000 sales 72000 20 of 4... View the full answer