Prasad & Co. wishes to prepare cash budget from January. Prepare a cash budget for the first six months from the following estimated revenue and expenses: Wages Month Total Sales Materials Production Selling and OMR. OMR. OMR. Overheads Distribution OMR. Overheads OMR. January February 10,000 11,000 14,000 15,000 15,000 20,000 10,000 7,000 7,000 11,000 10,000 12,500 2,000 2,200 2,300 2,300 2,000 2,500 1,600 1,650 1,700 1,750 1,600 1,500 400 450 March 450 April May 500 450 June 600 Additional Information 1. Cash balance on 1st January was OMR. 5,000. A new machinery is to be installed at OMR. 10,000 on credit, to be repaid by two equal installments in March and April. 2. Sales commission @ 5 % on total sales is to be paid within a month of following actual sales. 3. OMR. 5,o00 being the amount of 2nd call may be received in March. Share Premium amounting to OMR. 1,000 is also obtainable with the 2nd call. 4. Period of credit allowed by suppliers - 2 months. 5. Period of credit allowed to customers - 1 month. 6. Delay in payment of overheads - 1 mo nth. 7. Delay in payment of wages -I month. 8. Assume cash sales to be 50 9% of total sales.

Prasad & Co. wishes to prepare cash budget from January. Prepare a cash budget for the first six months from the following estimated revenue and expenses: Wages Month Total Sales Materials Production Selling and OMR. OMR. OMR. Overheads Distribution OMR. Overheads OMR. January February 10,000 11,000 14,000 15,000 15,000 20,000 10,000 7,000 7,000 11,000 10,000 12,500 2,000 2,200 2,300 2,300 2,000 2,500 1,600 1,650 1,700 1,750 1,600 1,500 400 450 March 450 April May 500 450 June 600 Additional Information 1. Cash balance on 1st January was OMR. 5,000. A new machinery is to be installed at OMR. 10,000 on credit, to be repaid by two equal installments in March and April. 2. Sales commission @ 5 % on total sales is to be paid within a month of following actual sales. 3. OMR. 5,o00 being the amount of 2nd call may be received in March. Share Premium amounting to OMR. 1,000 is also obtainable with the 2nd call. 4. Period of credit allowed by suppliers - 2 months. 5. Period of credit allowed to customers - 1 month. 6. Delay in payment of overheads - 1 mo nth. 7. Delay in payment of wages -I month. 8. Assume cash sales to be 50 9% of total sales.

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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