The following information is available from the accounting records of Waxford Ltd.:19--JanuaryFebruaryMarchAprilPurchasesR42 00048 00054 00036 000PurchasesTotal salesAdministrative expensesTotal salesR72 00066 000Twenty percent of sales are expected to be for cash. Collections from customers arenormally 70% in the month of sale, 20% in the month following the month of sale, and9% in the second month following the month of sale. Customers paying in the month ofsale get a 5% discount.78 00060 000The corporation pays its creditors in the month following the month of purchase, andqualifies for a 5% discount on all its purchases.Budgeted information for the months of May and June is as follows:MayR45 00072 00014 500JuneR42 00070 00016 600Administrative expenses, which include depreciation of R600 per month, are payable inthe month incurred. Rates for the year, amounting to R1 500, are included in theadministrative expenses for June.The balance per cash book at May 1 was R12 000 (credit).During May a motor vehicle with a cost of R15 000, and on which depreciation of R12000 has been accumulated, will be sold at a profit of R2 000.Required:Draw up a cash budget for the months of May and June 19--, on a month-to-monthbasis.

Cash Budget A money budget is a forecast or schedule of anticipated cash inflows and outflows for…

Administrative expenses, which include depreciation of R600 per month, are payable in the month incurred. Rates for the year, amounting to R1 500, are included in the administrative expenses for June. The balance per cash book at May 1 was R12 000 (credit). During May a motor vehicle with a cost of R15 000, and on which depreciation of R12 000 has been accumulated, will be sold at a profit of R2 000. Required: Draw up a cash budget for the months of May and June 19--, on a month-to-month basis.

Administrative expenses, which include depreciation of R600 per month, are payable in the month incurred. Rates for the year, amounting to R1 500, are included in the administrative expenses for June. The balance per cash book at May 1 was R12 000 (credit). During May a motor vehicle with a cost of R15 000, and on which depreciation of R12 000 has been accumulated, will be sold at a profit of R2 000. Required: Draw up a cash budget for the months of May and June 19--, on a month-to-month basis.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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Question

100%

The following information is available from the accounting records of Waxford Ltd.:
19--
January
February
March
April
Purchases
R42 000
48 000
54 000
36 000
Purchases
Total sales
Administrative expenses
Total sales
R72 000
66 000
Twenty percent of sales are expected to be for cash. Collections from customers are
normally 70% in the month of sale, 20% in the month following the month of sale, and
9% in the second month following the month of sale. Customers paying in the month of
sale get a 5% discount.
78 000
60 000
The corporation pays its creditors in the month following the month of purchase, and
qualifies for a 5% discount on all its purchases.
Budgeted information for the months of May and June is as follows:
May
R45 000
72 000
14 500
June
R42 000
70 000
16 600
Administrative expenses, which include depreciation of R600 per month, are payable in
the month incurred. Rates for the year, amounting to R1 500, are included in the
administrative expenses for June.
The balance per cash book at May 1 was R12 000 (credit).
During May a motor vehicle with a cost of R15 000, and on which depreciation of R12
000 has been accumulated, will be sold at a profit of R2 000.
Required:
Draw up a cash budget for the months of May and June 19--, on a month-to-month
basis.

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