Question number 4,5,6 Saudi Agricultural Company, engaged in manufacturing bricks and otherrelevant items and most of the transaction accomplished in 'Cash' only.The company is giving following transactions for the year 2020, you arerequired to prepare 'CASH BUDGET' for three months from February toApril.Following are company policies for paying and receiving Cash:1.20% Sales is for cash and the remaining amount is realized in themonth following that of sales.Suppliers Supply raw materials at one month's credi3.Wage-bill is paid in first week of next month.4.Overheads are paid in cash in the same month.5.Monthly rent payment is ` 1,000.6.Advance Income Tax of ` 15,000 is payable in April.7.Bonus of ` 10,000 is payable to workers in February.8.Plant Costing 80,000 is due to be installed in February. The part of thebill will be paid in March amounting to ` 18,500.9.Half year interest on 12% ` 50,000 Debentures is to be received inFebruary and August every year.10.Cash at Bank on 1st February estimated at `5,000. Company is proving details of month's expenses as follows:2020SalesPurchasesWagesOverheadsMonthsJanuary85,00048,00010,00012,500February90,00052,00011,00013,500March1,20,00060,00014,00015,000April1,30,00062,00014,00016,000You are required to:1. Explain Cash Budget2. Prepare Cash budget for Company3. Interpret the Results.4. Give your recommendation for Credit Policy of Company.5. What do you think about company's Cash or Liquid Position?6. How company can increase its liquidity?

Cash budget is a forecast of the cash collection and payments expected in the coming period. Cash…

Company is proving details of month's expenses as follows: 2020 Sales Purchases Wages Overheads Months January 85,000 48,000 10,000 12,500 February 90,000 52,000 11,000 13,500 March 1,20,000 60,000 14,000 15,000 Apil 1,30,000 62,000 14,000 16,000 You are required to: 1. Explain Cash Budget 2. Prepare Cash budget for Company 3. Interpret the Results. 4. Give your recommendation for Credit Policy of Company. 5. What do you think about company's Cash or Liquid Position? 6. How company can increase its liquidity?

Company is proving details of month's expenses as follows: 2020 Sales Purchases Wages Overheads Months January 85,000 48,000 10,000 12,500 February 90,000 52,000 11,000 13,500 March 1,20,000 60,000 14,000 15,000 Apil 1,30,000 62,000 14,000 16,000 You are required to: 1. Explain Cash Budget 2. Prepare Cash budget for Company 3. Interpret the Results. 4. Give your recommendation for Credit Policy of Company. 5. What do you think about company's Cash or Liquid Position? 6. How company can increase its liquidity?

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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