City rentals ltd offer apartments to rent for private tenants in city centres across the UK; below is a schedule of the expected rental income due for the first 6 months of 2021Month January February March April May JuneRent due £62,000 £65,000 £65,000 £59,000 £61,000 £63,000The collection of the rental income varies significantly so City rentals ltd has established the following average trends which the company uses as the basis for its cash budgeting:• 10% of tenants take advantage of a 2% discount offered for payment in advance and pay in the month before the rent is due. • 70% pay in the month the rent is due.• 12% pay one month after the rent is due.• A further 5% pay two months after the rent is due.• The balance is unable to be collected by City rentals ltd.What will be the budgeted cash receipts for April from rental income? nA1City rentals Itd offer apartments to rent for private tenants in city centres acrossthe UK; below is a schedule of the expected rental income due for the first 6months of 2021MonthRent dueJanuary£62,000February March£65,000April£65,000 £59,000May£61,000 £63,000JuneThe collection of the rental income varies significantly so City rentals Itd hasestablished the following average trends which the company uses as the basis forits cash budgeting:• 10% of tenants take advantage of a 2% discount offered for payment in advanceand pay in the month before the rent is due.70% pay in the month the rent is due.12% pay one month after the rent is due.A further 5% pay two months after the rent is due.The balance is unable to be collected by City rentals Itd.What will be the budgeted cash receipts for April from rental income?en A2

Budgeted cash collection is the estimated amount to be received in the particular month based on the…

Answered: City rentals Itd offer apartments to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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City rentals ltd offer apartments to rent for private tenants in city centres across the UK; below is a schedule of the expected rental income due for the first 6 months of 2021 Month January February March April May June Rent due £62,000 £65,000 £65,000 £59,000 £61,000 £63,000 The collection of the rental income varies significantly so City rentals ltd has established the following average trends which the company uses as the basis for its cash budgeting: • 10% of tenants take advantage of a 2% discount offered for payment in advance and pay in the month before the rent is due. • 70% pay in the month the rent is due. • 12% pay one month after the rent is due. • A further 5% pay two months after the rent is due. • The balance is unable to be collected by City rentals ltd. What will be the budgeted cash receipts for April from rental income?

nA1
City rentals Itd offer apartments to rent for private tenants in city centres across
the UK; below is a schedule of the expected rental income due for the first 6
months of 2021
Month
Rent due
January
£62,000
February March
£65,000
April
£65,000 £59,000
May
£61,000 £63,000
June
The collection of the rental income varies significantly so City rentals Itd has
established the following average trends which the company uses as the basis for
its cash budgeting:
• 10% of tenants take advantage of a 2% discount offered for payment in advance
and pay in the month before the rent is due.
70% pay in the month the rent is due.
12% pay one month after the rent is due.
A further 5% pay two months after the rent is due.
The balance is unable to be collected by City rentals Itd.
What will be the budgeted cash receipts for April from rental income?
en A2

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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