Prepare a monthly cash budget for the FOUR months from 1st Jan to 30 April 2021. calculations are easy send them within 30 mins
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Thorne Estates Limited advertises and sells residential property on behalf of its
customers. The company has been in business for only a short time and is
preparing a
residential properties are as follows:
2020 2021 2021 2021 2021
Month Dec Jan Feb Mar Apr
Units Sold 10 10 15 25 30
The average price of each property is £180,000 and Thorne Estates charges a fee
of 3% of the value of each property sold. Thorne Estates receives a 1% in the
month of sale and the remaining 2% in the month after sale.
The company has nine employees who are paid on a monthly basis. The average
salary per employee is £35,000 per year. If more than 20 properties are sold in a
given month, each employee is paid in that month a bonus of £140 for each
additional property sold.
Variable expenses are incurred at the rate of 0.5% of the value of each property
sold and these expenses are paid in the month of sale. Fixed overheads of £4,300
per month are paid in the month in which they arise. Thorne Estates pays interest
every three months on a loan of £200,000 at a rate of 6% per year. The last
Interest payment in each year is paid in December. Rent of £42,000 will fall due at
the end of May.
An outstanding tax liability of £95,800 is due to be paid in April. In the same
month, Thorne Estates intends to dispose of surplus vehicles, with a net book
value of £15,000 for £20,000. The cash balance at the start of January 2021 is
expected to be a deficit of £40,000.
Required:
1. Prepare a monthly cash budget for the FOUR months from 1st Jan to 30 April
2021. calculations are easy send them within 30 mins
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