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Budget Preparation
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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney
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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney
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Solution Manual for Management Accounting for Decision Makers 10th Edition by Peter Atrill, Eddie McLaney
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Prepare cash budget for January-June from the following information:(i) The estimated sales and expenses are as follows:
(ii) 20 per cent of the sales are on cash and balance on credit.
(iii) The firm has a gross margin of 25 per cent on sales.
(iv) 50 per cent of the credit sales are collected in the month following the sales, 30 per cent
in the second month and 20 per cent in the third month.
(v) Material for the sale of each month is purchased one month in advance on a credit for two
months.
(vi)The time-lag in the payment of wages and salaries is one-third of a month and of
miscellaneous expenses, one month.
(vii) Debentures worth Kes 40,000 were sold in January.
(viii) The firm maintains a minimum cash balance of Kes 40,000. Funds can be borrowed @
12 per cent per annum in the multiples of Kes 1,000, the interest being payable on monthly
basis.
(ix) Cash balance at the end of December is Kes 60,000.
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