Prepare the monthly cash budget of Tox Ltd for the period January- March 201 (Please show me workings)
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.
Tox ltd management expect the next three months from January to March 2018 to demand
some unusual
1. Sales for December 2017: R1 339 200
2. Total sales
• January 2018 R 669 600
• February 2018 R 892 800
• March 2018 R 781 200
•
April 2018 R 892 800
3. 40% of all sales are on credit, while cash sales amount to 60% of total sales.
4. Cost of goods sold average 75% of sales. Inventory purchased during each month
averages the cost of sales for the following month. The creditor payment period
averages 15 days and goods are purchased consistently over the month.
5. Operating expenses are projected as follows:
• Salaries and wages at 12% of sales paid in the month of the sale.
• Other expenses at an average of 10%of sales paid in the month of the sale.
• Cash receipts expected from repayment of a loan to an employee of R 22 320
due in March 2018.
• Repayment of short-term loan of R11 160 is due in March 2018.
• Repayments of long-term loans is due at R14 880 each in January and March
2018.
• Anew refrigerator was purchased for R 178 560 and four payments of R44
640 each are due in February, March, April, and May 2018.
•
• Interest income from an investment of R 18 228 per month is expected
• A bonus of R 195 300 is due to staff in January 2018.
• The company must pay tax to SARS in March 2018, R52 080.
Required:
Prepare the monthly
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