8. Cash sales is expected to be made as follows: August GHe 140,000SeptemberGH¢100,000GH€200,000OctoberNovemberGH$120,000GH€ 140,000DecemberThe 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 debt9. 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.RequiredPrepare cash budget, for the three month from October to December, 2021 showing cash balance atthe end of December. Nana Adom Company Limited is a wholesale company that deals in general goods. The followinginformation relates to the last quarter of the year 2021.1. Expenses: (in GHC)OctoberNovemberDecemberSelling & distribution20,00030,00034,000General & administration15,00018,00012,000Bad debts21,00015,00020,000Rate8,0006,00010,000Interest charges1,6002,0002,400Depreciation expenses30,00010,00010,000Expenses are payable in the month of incurrence.2.A contingent liability of GH¢10,000 is expected to mature in November3.Estimated cash balance at the end of September will be GHe 5000. Cash balances should not be less thanGH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance any deficit at an interest rateof 15% per annum.4. The sales manager's salary, which is GHe 7000 per month, is expected to increase by GH€ 1000 everymonth after June.5.Motor vehicle will be purchased in November for GH$240,000. Depreciation for motor van should becalculated at 10% in December.6.Credit purchases have been budgeted as follows:GH€200,000SeptemberOctoberGH€ 240,000NovemberGH$200,000DecemberGH€300,00075% 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 20,000September 18,000October21,000November15,000December20,000Sales are likely to be made at a unit price of GH¢ 30.8. Cash sales is expected to be made as follows: August GH€ 140,000GH¢100,000SeptemberOctoberGH€200,000

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Answered: Prepare cash budget, for the three…

Business

Accounting

Prepare cash budget, for the three month from October to December, 2021 showing cash balance at the end of December.

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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Bb.31.
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