Hilton Holdings has provided the following information regarding its expected activities from July to December 2023. Month / Item July £ August £ September £ October £ November £ December £ Sales 35,000 42,000 46,000 48,000 52,000 55,000 Purchases 32,000 33,500 37,000 42,000 43,000 37,500 Wages & salaries 6,000 6,000 6,000 7,200 7,200 7,200 Rent 12,000 - - 15,000 - - Advertising 1,700 1,800 1,500 1,200 1,800 1,500 Overheads 900 1,100 1,150 1,250 1,500 1,700 Drawings 2,000 4,000 3,500 3,000 4,000 5,000 The following additional information are also provided: The expected cash balance as of 1 October 2023 is £20,000. Sales are 60% on cash and 40% on credit. Payment for credit sales is expected to receive after one month from the month of sales. Purchases are all on credit. Credit terms of purchases require payment to be made within three months from the month of purchase. The owner of the company, Richard to take full advantage of these credit terms. Other expenses to be paid in the month in which they are expected to occur. Richard to receive dividend of £8,000 in November 2023. In October, the business to sell an old vehicle for £2,500 cash and expected to pay cash for a new vehicle in November 2023, which is estimated to cost £18,000. Richard plans to contribute £18,500 cash and £15,000 worth stationery in December 2023. New shop fittings valued £3,575 to be purchase in October 2023. Prepare a Budgeted Cash Flow Statement for Hilton Holdings for the period October to December 2023 Comment on the results and suggest three actions the management of the company may consider improving the cash flow situation of the company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Hilton Holdings has provided the following information regarding its expected activities from July to December 2023.

Month / Item	July £	August £	September £	October £	November £	December £
Sales	35,000	42,000	46,000	48,000	52,000	55,000
Purchases	32,000	33,500	37,000	42,000	43,000	37,500
Wages & salaries	6,000	6,000	6,000	7,200	7,200	7,200
Rent	12,000	-	-	15,000	-	-
Advertising	1,700	1,800	1,500	1,200	1,800	1,500
Overheads	900	1,100	1,150	1,250	1,500	1,700
Drawings	2,000	4,000	3,500	3,000	4,000	5,000

The following additional information are also provided:

The expected cash balance as of 1 October 2023 is £20,000.
Sales are 60% on cash and 40% on credit. Payment for credit sales is expected to receive after one month from the month of sales.
Purchases are all on credit. Credit terms of purchases require payment to be made within three months from the month of purchase. The owner of the company, Richard to take full advantage of these credit terms.
Other expenses to be paid in the month in which they are expected to occur.
Richard to receive dividend of £8,000 in November 2023.
In October, the business to sell an old vehicle for £2,500 cash and expected to pay cash for a new vehicle in November 2023, which is estimated to cost £18,000.
Richard plans to contribute £18,500 cash and £15,000 worth stationery in December 2023.
New shop fittings valued £3,575 to be purchase in October 2023.

Prepare a Budgeted Cash Flow Statement for Hilton Holdings for the period October to December 2023

Comment on the results and suggest three actions the management of the company may consider improving the cash flow situation of the company.

Expert Solution

Step by step

Solved in 4 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions