A company has made the following budget forecasts for next year: R Opening cash balance 1 January 24 000 Net profit from trading for the year 100 000 Payment of tax 25 000 Payment of dividends 20 000 Purchase of new fixed assets 70 000 Annual depreciation charge 22 000 1 January 31 December Stocks R32 000 R35 000 Debtors R41 000 R28 000 Creditors R16 000 R31 000 No other relevant information is available. What is the company's budgeted cash holding at 31 December next year? Select one: a. R56 000 b. R34 000 c. R26 000 d. R6 000
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Q45
A company has made the following budget
| R | |
|---|---|
| Opening cash balance 1 January | 24 000 |
| Net profit from trading for the year | 100 000 |
| Payment of tax | 25 000 |
| Payment of dividends | 20 000 |
| Purchase of new fixed assets | 70 000 |
| Annual |
22 000 |
| 1 January | 31 December | |
|---|---|---|
| Stocks | R32 000 | R35 000 |
| Debtors | R41 000 | R28 000 |
| Creditors | R16 000 | R31 000 |
No other relevant information is available. What is the company's budgeted cash holding at 31 December next year?
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