HASF Inc a distributor of cosmetics throughout Karachi, is in the process of assembling a cash budget for the first quarter 2015 the following information has been extracted from the company s’ accounting records 1. All sales divided in equal part between cash and credit sales. 45 % of credit sales are collected in the month of sales 45% are collected in the following month and remaining is uncollectible. Management believes that only 20% of the a/c receivable outstanding on December 2014 will be recovered that the recovery will be in January 2015 2. 65% of Purchase are paid for in the month of purchase the remaining 35% are paid for in the month after acquisition 3. The December 31 2014 balance sheet disclosed the following selected figures cash 20,000 a/c receivable 55,000 and a/c payable 22,000 4. Company Maintains a 20,000 minimum cash balance at all time. Financing is available in 1,000 multiples at an 8% interest rate interest is paid ate the time of repaying principle. Additinal data: Jan Feb March Sales 150,000 180,000 185,000 Purchases 90,000 100,000 140,000 Cash operating cost 31,000 24,000 45,000 Proceeds from the sales of equipment 5,000 Note: No need to enter comma between number Required: 1. Total amount of cash will be received at end March 31 ( Jan + Feb + March ) 2. Total amount of total cash disburstment at end of March 31 ( jan + feb + march ) 3. Total amount of loan ( jan + feb + March )
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Question 1
HASF Inc a distributor of cosmetics throughout Karachi, is in the process of assembling a
1. All sales divided in equal part between cash and credit sales. 45 % of credit sales are collected in the month of sales 45% are collected in the following month and remaining is uncollectible. Management believes that only 20% of the a/c receivable outstanding on December 2014 will be recovered that the recovery will be in January 2015
2. 65% of Purchase are paid for in the month of purchase the remaining 35% are paid for in the month after acquisition
3. The December 31 2014
4. Company Maintains a 20,000 minimum cash balance at all time. Financing is available in 1,000 multiples at an 8% interest rate interest is paid ate the time of repaying principle.
Additinal data:
| Jan | Feb | March | |
| Sales | 150,000 | 180,000 | 185,000 |
| Purchases | 90,000 | 100,000 | 140,000 |
| Cash operating cost | 31,000 | 24,000 | 45,000 |
| Proceeds from the sales of equipment | 5,000 |
Note: No need to enter comma between number
Required:
1. Total amount of cash will be received at end March 31 ( Jan + Feb + March )
2. Total amount of total cash disburstment at end of March 31 ( jan + feb + march )
3. Total amount of loan ( jan + feb + March )
4. Cash balacne at end of March 31
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