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					Cash Budgeting
Fullysik Imports operates its business in St.Albans and asks you to prepare its budgets
for the quarter ending 31 December 2011
They provide you with the following information.

                     Estimated Sales                    Estimated Purchases
July                                $70,000                        $26,000
August                              $65,000                        $25,000
September                           $62,000                        $24,000
October                             $58,000                        $25,000
November                            $60,000                        $23,000
December                            $55,000                        $28,000

Sales are expected to be                  30% for cash,        70% on credit.
The value owing for credit sales are expected to be collected in the following way:
               50% in the month following the month of sale.
               30% in the second month following the month of sale.
               15% in the third month following the month of sale.
               5%     are uncollectable.
All purchases are made on credit, and are expected to be paid for in the following way:
       40% in the month of purchase.                60% in the month following the month of purchase.
Monthly selling expenses are budgeted at                                 5%
                                                 $4,000 fixed plus variable of total sales.variable.
Monthly administrative expenses are budgeted at            $3,000 fixed plus
variable of    10% of total sales.
Depreciation of Office equipment is included in the administration expenses shown above.
Depreciation of Office equipment is            $3,600 p.a.
Finance expenses are expected to be            $8,000 per month. This does include the bad debts
expense, which is recognised immediately in the month of sale.
In October they intend to buy some new equipment for                  $50,000
Paying a deposit in October of          $5,000 and repayments of        $8,000
a month starting in November.
In December they expect to receive             $12,000 cash for the sale of an old vehicle.
Cash at bank at 1 October 2011                  $45,000

Required:
(a) Prepare a table showing Collections from Debtors by month, for the three month period ending 31
December 2011

(b) Prepare a Cash Budget by month and for the quarter, for the three months ending 31 December 2011
Answer.
(a) Collection from Debtors.
                                          Fullysik Imports
            Schedule of Collections from Debtors for the Quarter ending 31 December 2011
Month




TOTAL
                                         Fullysik Imports

            Schedule of Payments to Creditors for the Quarter ending 31 December 2011

Month




TOTAL



(b)   Cash Budget


                                         Fullysik Imports
        Cash Budget by month and for the quarter, for the 3 months ending 31 December 2011
                                                                                    TOTAL


Receipts




Payments




Closing Cash
balance
Fullysik Imports operates its business in St.Albans and asks you to prepare its budgets
for the quarter ending 31 December 2011
They provide you with the following information.

                     Estimated Sales                     Estimated Purchases
July                                $70,000                         $26,000
August                              $65,000                         $25,000
September                           $62,000                         $24,000
October                             $58,000                         $25,000
November                            $60,000                         $23,000
December                            $55,000                         $28,000

Sales are expected to be                  30% for cash,        70% on credit.
The value owing for credit sales are expected to be collected in the following way:
               50% in the month following the month of sale.
               30% in the second month following the month of sale.
               15% in the third month following the month of sale.
                5%    are uncollectable.
All purchases are made on credit, and are expected to be paid for in the following way:
        40% in the month of purchase.               60% in the month following the month of purchase.
Monthly selling expenses are budgeted at                                 5%
                                                 $4,000 fixed plus variable of total sales.variable.
Monthly administrative expenses are budgeted at            $3,000 fixed plus
variable of    10% of total sales.
Depreciation of Office equipment is included in the administration expenses shown above.
Depreciation of Office equipment is            $3,600 p.a.
Finance expenses are expected to be            $8,000 per month. This does include the bad debts
expense, which is recognised immediately in the month of sale.
In October they intend to buy some new equipment for                  $50,000
Paying a deposit in October of          $5,000 and repayments of        $8,000
a month starting in November.
In December they expect to receive             $12,000 cash for the sale of an old vehicle.
Cash at bank at 1 October 2011                 $45,000

Required:
(a) Prepare a table showing Collections from Debtors by month, for the three month period ending 31
December 2008

(b) Prepare a Cash Budget by month and for the quarter, for the three months ending 31 December 2008
Answer.
(a) Collection from Debtors.
                                           Fullysik Imports
             Schedule of Collections from Debtors for the Quarter ending 31 December 2011
        Month               Credit Sales          October            November           December

        July                  49,000                  7,350
       August                 45,500                 13,650               6,825

     September                43,400                 21,700               13,020             6,510

      October                 40,600                                      20,300             12,180

     November                 42,000                                                         21,000

     December                 38,500
TOTAL                      $259,000               $42,700          $40,145            $39,690

                                           Fullysik Imports

             Schedule of Payments to Creditors for the Quarter ending 31 December 2011

       Month           Credit Purchases           October         November           December

September                  $24,000                $14,400

October                    $25,000                $10,000          $15,000

November                   $23,000                                  $9,200            $13,800

December                   $28,000                                                    $11,200
TOTAL                      $100,000               $24,400          $24,200            $25,000



(b)   Cash Budget


                                           Fullysik Imports
        Cash Budget by month and for the quarter, for the 3 months ending 31 December 2011
                           October               November         December             TOTAL
Op. Bank Balance                      45,000            54,330            58,675
Receipts
Cash Sales                17,400               18,000            16,500             51,900
Debtor Collections        42,700               40,145            39,690            122,535
Sale of Vehicle                                                  12,000             12,000


Total Receipts                        60,100            58,145            68,190


Payments
Creditor Payments         24,400               24,200            25,000             73,600
Selling Expenses           4,000                4,000             4,000             12,000
                           2,900                3,000             2,750              8,650
Admin Expenses             3,000                3,000             3,000              9,000
                           5,800                6,000             5,500             17,300
                            -300                 -300              -300               -900
Finance Expenses           8,000                8,000             8,000             24,000
                          -2,030               -2,100            -1,925             -6,055
New Equipment              5,000                8,000             8,000             21,000


Total Payments                        50,770            53,800            54,025
Closing Cash
balance        $54,330   $58,675   $72,840
                   in the month following the month of purchase.
                                        of total sales.variable.


cluded in the administration expenses shown above.

                    per month. This does include the bad debts
ately in the month of sale.




ons from Debtors by month, for the three month period ending 31


h and for the quarter, for the three months ending 31 December 2008


      Fullysik Imports
from Debtors for the Quarter ending 31 December 2011
                                                 December




                                                         6,510

                                                        12,180

                                                        21,000
                                                  $39,690

       Fullysik Imports

to Creditors for the Quarter ending 31 December 2011

                                                 December




                                                  $13,800

                                                  $11,200
                                                  $25,000




       Fullysik Imports
for the quarter, for the 3 months ending 31 December 2011
                                                   TOTAL
                                                            45,000




                                                        186,435




                                                        158,595
$72,840
Cash, P & L, and Balance Sheet
Kim Kardashian run a Waste Disposal business called Trailer Park Trash.
The business has following assets and liabilities as at 30th November 2011


Assets                                                                       Liabilities
Bank                                                      $64,800            Creditors       $28,790
Debtors                                                   $32,400            Loan           $230,000
Prepaid Insurance                                          $8,900
Inventory                                                 $22,300            Capital        $152,310
Vehicles                                                 $175,000
Equipment                                                $210,000
Accumulated depreciation on the Equipment               -$102,300
Other information:
Fees for December are budgeted at           $156,000
Fees are cash          35%                  and credit    65%
Collections from Debtors are       35% in the month of service and
  65% in the month following the month of service.
Prepaid Insurance should decrease by                   $1,200
December purchases are budgeted at         $96,500 All on credit.
Creditors are paid     20%     in the month of purchase and
  80% in the month following the month of purchase
Estimated inventory on 31 Dec is                          $18,900
Cash Operating expenses in Dec are estimated to be                 $32,900
Some of the Equipment is sold on Dec 1 for               $13,400 cash.       Its original cost was
 $38,900 and it had Accumulated Depreciation of          $24,500
Depreciation on the equipment for the month of Dec is               $2,600
Required:
Prepare the following:
(a) the cash budget for Dec 2011
(b) the budgeted profit and loss statement for Dec 2011, and
(c ) the budgeted balance sheet as at 31 Dec 2011
                                        Trailer Park Trash
                             Cash Budget for the month of Dec 2011

Opening Cash balance
Receipts




Payments
                                  Trailer Park Trash
             Budgeted Profit and Loss Statement for the month of Dec 2011
                                                             $              $
Revenue


Less Cost of Goods Sold




Gross Profit




Net Profit



                                       Trailer Park Trash
                           Budgeted Balance Sheet as at 31 Dec 2011
Assets - Current                  $         $      Liabilities              $   $




Assets - Non current                               Owners Equity
Kevin Spears and Britney Federline run a Waste Disposal business called Trailer Park Trash.
The business has following assets and liabilities as at 30th November 2011


Assets                                                                       Liabilities
Bank                                                     $64,800             Creditors      $28,790
Debtors                                                  $32,400             Loan          $230,000
Prepaid Insurance                                         $8,900
Inventory                                                $22,300             Capital       $152,310
Vehicles                                                $175,000
Equipment                                               $210,000
Accumulated depreciation on the Equipment              -$102,300
Other information:
Fees for December are budgeted at          $156,000
Fees are cash         35%                 and credit         65%
Collections from Debtors are 35%       in the month of service and
  65% in the month following the month of service.
Prepaid expenses should decrease by                  $1,200
December purchases are budgeted at        $96,500 All on credit.
Creditors are paid 20% in the month of purchase and
  80% in the month following the month of purchase
Estimated inventory on 31 Dec is                         $18,900
Cash Operating expenses in Dec are estimated to be                 $32,900
Some of the Equipment is sold on Dec 1 for             $13,400 cash.         Its original cost was
 $38,900 and it had Accumulated Depreciation of        $24,500
Depreciation on the equipment for the month of Dec is               $2,600
Required:
Prepare the following:
(a) the cash budget for Dec 2011
(b) the budgeted profit and loss statement for Dec 2011, and
(c ) the budgeted balance sheet as at 31 Dec 2011
                                        Trailer Park Trash
                             Cash Budget for the month of Dec 2011

Beginning Cash balance                                                          64,800
Receipts
           Cash Sales                                                           54,600
           Collections from Debtors                                             67,890
           Sale of Equipment                                                    13,400


           Total Receipts                                                      135,890
Payments
           Payments to Creditors                                                48,090
           Cash Operating Expenses                                              32,900


           Total Payments                                                       80,990


           Closing Bank Balance                                                119,700
                                  Trailer Park Trash
             Budgeted Profit and Loss Statement for the month of Dec 2011
                                                             $                $
Revenue
            Fees                                                            156,000
Less Cost of Goods Sold
            Opening Inventory                                      22,300
            Purchases                                              96,500
            Closing Inventory                                      18,900    99,900


Gross Profit                                                                 56,100
Add/(Less) Profit/(Loss) on Sale of Equipment                      -1,000    55,100
Other Expenses
            Cash Operating Expenses                                32,900
            Depreciation                                            2,600
            Insurance                                               1,200    36,700


Net Profit                                                                  $18,400



                                             Trailer Park Trash
                                Budgeted Balance Sheet as at 31 Dec 2011
Assets - Current                    $            $        Liabilities         $         $
Bank                               119,700                Creditors          77,200
Debtors                             65,910                Loan              230,000
Prepaid Insurance                    7,700                                             307,200
Inventory                           18,900      212,210
Assets - Non current                                      Owners Equity
Vehicles                           175,000                Capital           152,310
Equipment                          171,100                Profit             18,400
Acc Depreciation                   -80,400      265,700                                170,710


                                               $477,910                               $477,910
Performance Report
From the given information, you are required to prepare a Performance report for the month of Nov
2011. The report is to show Variance and percentage variance. Show all $ values to the
nearest $, and all % values to 2 decimal places.
I. Am is a beauty therapist The budget for the current financial year is:
Support Labour                      $98,000
Rent                                $18,000
Electricity                           $4,200
Hair Products                       $15,000
Cleaning                              $6,000
Depreciation                          $4,800
Telephone                             $7,800
Advertising                         $12,360
The total budget is apportioned equally each month.
It is anticipated that:              $550,000 will be earned from fees for the year.
                                      $78,000 will be paid for professional labour for the year.

Actual results were:           November-11

Fees Income                           $43,680
Professional labour                    $5,980
Support Labour                         $8,125
Rent                                   $1,500
Electricity                              $320
Hair Products                            $975
Cleaning                                 $540
Depreciation                             $400
Telephone                                $730
Advertising                            $1,780

                    Performance Report for the month of Nov 2011
                                  Budget             Actual          Variance     U/F   % Variance
                                     $                  $                $                 %
Fees Income


Professional labour
Support Labour
Rent
Electricity
Hair Products
Cleaning
Depreciation
Telephone
Advertising


Profit
From the given information, you are required to prepare a Performance report for the month of Nov
2011. The report is to show Variance and percentage variance. Show all $ values to the nearest
$, and all % values to 2 decimal places.
C.Ling is an beauty therapist The budget for the current financial year is:
Support Labour                        $98,000
Rent                                  $18,000
Electricity                            $4,200
Hair Products                         $15,000
Cleaning                               $6,000
Depreciation                           $4,800
Telephone                              $7,800
Advertising                           $12,360
The total budget is apportioned equally each month.
It is anticipated that:            $550,000 will be earned from fees for the year.
                                    $78,000 will be paid for professional labour for the year.

Actual results were:         November-11

Fees Income                         $43,680
Professional labour                  $5,980
Support Labour                       $8,125
Rent                                 $1,500
Electricity                            $320
Hair Products                          $975
Cleaning                               $540
Depreciation                           $400
Telephone                              $730
Advertising                          $1,780

                    Performance Report for the month of Nov 2011
                                Budget            Actual           Variance        U/F   % Variance
                                   $                 $                 $                    %
Fees Income                           45,833            43,680          2,153                 4.70%


Professional labour                    6,500               5,980          520                 8.00%
Support Labour                         8,167               8,125              42              0.51%
Rent                                   1,500               1,500              0               0.00%
Electricity                              350                320               30              8.57%
Hair Products                          1,250                975           275                22.00%
Cleaning                                 500                540            -40               -8.00%
Depreciation                             400                400               0               0.00%
Telephone                                650                730            -80              -12.31%
Advertising                            1,030               1,780         -750               -72.82%


Profit                                25,487            23,330          2,157                 8.46%

				
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