Nana Adom Company Limited is a wholesale company that deals in general goods. The following information relates to the last quarter of the year 2021. 1. Expenses: (in GH¢) October November December Selling & distribution 20,000 30,000 34,000 General & administration 15,000 18,000 12,000 Bad debts 21,000 15,000 20,000 Rate 8,000 6,000 10,000 Interest charges 1,600 2,000 2,400 Depreciation expenses 30,000 10,000 10,000 Expenses are payable in the month of incurrence. 2. A contingent liability of GH¢10,000 is expected to mature in November 3. Estimated cash balance at the end of September will be GH¢5000. Cash balances should not be less than GH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance any deficit at an interest rate of 15% per annum. 4. The sales manager's salary, which is GH¢ 7000 per month, is expected to increase by GH¢1000 every month after June. 5. Motor vehicle will be purchased in November for GH¢240,000. Depreciation for motor van should be calculated at 10% in December. 6. Credit purchases have been budgeted as follows: September GH¢200,000 October GH¢240,000 November GH¢200,000 December GH¢300,000 75% of purchases are paid for in the month of purchase and the remainder in the month after purchase. 7. Details of expected sales (in units) are given below: August 20,000 September 18,000 October 21,000 November 15,000 December 20,000 Sales are likely to be made at a unit price of GH¢ 30. 8. Cash sales is expected to be made as follows: August GH¢140,000 September GH¢100,000 October GH¢200,000 5 November GH¢120,000 December GH¢140,000 The pattern for the collection of debts from customers is expected to be as follows: a. 60% in the month of sales (3% cash discount allowed). b. 20% in the first month after the month of sale. c. 15% in the second month after the month of sale. d. 5% is usually regarded as bad debt 9. Excess funds are invested (in multiples of GH¢10,000) in short term securities, at an interest rate of 20% per annum. 10. Borrowing must be paid together with any accrued interest whenever funds are available. Required Prepare cash budget, for the three month from October to December, 2021 showing cash balance at the end of December.
Nana Adom Company Limited is a wholesale company that deals in general goods. The following information relates to the last quarter of the year 2021. 1. Expenses: (in GH¢)
October
November
December Selling & distribution 20,000 30,000 34,000 General & administration 15,000
18,000
12,000
15,000
20,000 Rate 8,000
6,000
10,000 Interest charges 1,600
2,000
2,400
30,000 10,000
10,000 Expenses are payable in the month of incurrence. 2. A
5
November GH¢120,000 December GH¢140,000 The pattern for the collection of debts from customers is expected to be as follows: a. 60% in the month of sales (3% cash discount allowed). b. 20% in the first month after the month of sale. c. 15% in the second month after the month of sale. d. 5% is usually regarded as bad debt 9. Excess funds are invested (in multiples of GH¢10,000) in short term securities, at an interest rate of 20% per annum. 10. Borrowing must be paid together with any accrued interest whenever funds are available. Required Prepare
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