Q.No.1 M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: - a) Creditors are settled in the very next month of purchase. b) Salaries are paid in the current month. c) Fixed costs are paid in one-month arrears. d) Manufacturing expenses are paid in one-month advance. e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH. f) Credit Sales are settled as follows; a. 10% in the month of sales b. 40% in the next month 40% in the next following month, and the balance represents bad debts. с. g) A dividend of PKR 10,000 is payable in June. h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000. i) On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1st installment is made in advance on March 1. Month Cash Credit Credit Cash Salaries Fixed Manufacturing Purchases 5000 Sales Sales Purchases OH expenses 7000 50000 10000 11000 January February 8500 18000 60000 20000 12000 6000 18000 11000 8000 March 40000 30000 12000 4000 19000 11000 9000 April May June 60000 40000 15000 7000 19000 11000 10000 70000 35000 15000 8000 20000 11000 11000 75000 25000 10500 9000 20000 11000 12000 Required: a) Prepare Cash Budget for March, April and May.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q.No.1

 

 

M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: -

  1. Creditors are settled in the very next month of purchase.
  2. Salaries are paid in the current month.
  3. Fixed costs are paid in one-month arrears.
  4. Manufacturing expenses are paid in one-month advance.
  5. Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.
  6. Credit Sales are settled as follows;
    1. 10% in the month of sales
    2. 40% in the next month
    3. 40% in the next following month, and the balance represents bad debts.
  7. A dividend of PKR 10,000 is payable in June.
  8. Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000.
  9. On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1st installment is made in advance on March 1.

 

Month

Cash Sales

Credit Sales

Credit Purchases

Cash Purchases

Salaries

Fixed OH

Manufacturing expenses

January

50000

10000

8500

5000

18000

11000

7000

February

60000

20000

12000

6000

18000

11000

8000

March

40000

30000

12000

4000

19000

11000

9000

April

60000

40000

15000

7000

19000

11000

10000

May

70000

35000

15000

8000

20000

11000

11000

June

75000

25000

10500

9000

20000

11000

12000

 

Required:

  1. Prepare Cash Budget for March, April and May.
Q.No.1
M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following
information is available: -
a) Creditors are settled in the very next month of purchase.
b) Salaries are paid in the current month.
c) Fixed costs are paid in one-month arrears.
d) Manufacturing expenses are paid in one-month advance.
e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH.
f) Credit Sales are settled as follows;
а.
10% in the month of sales
b. 40% in the next month
c. 40% in the next following month, and the balance represents bad debts.
g) A dividend of PKR 10,000 is payable in June.
h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000.
i)
On March 1, we will buy an equipment on lease and its payment will be done in monthly
instalments of PKR 5000 each, 1st installment is made in advance on March 1.
Month
Cash
Credit
Credit
Cash
Salaries
Fixed
Manufacturing
Sales
Sales
Purchases
Purchases
OH
expenses
7000
10000
January
February
50000
8500
5000
18000
11000
60000
20000
12000
6000
18000
11000
8000
March
40000
30000
12000
4000
19000
11000
9000
April
May
60000
40000
15000
7000
19000
11000
10000
70000
35000
15000
8000
20000
11000
11000
June
75000
25000
10500
9000
20000
11000
12000
Required:
a) Prepare Cash Budget for March, April and May.
Transcribed Image Text:Q.No.1 M/s. XYZ Private Limited has a cash balance of PKR 20,000 at the ending of the February and the following information is available: - a) Creditors are settled in the very next month of purchase. b) Salaries are paid in the current month. c) Fixed costs are paid in one-month arrears. d) Manufacturing expenses are paid in one-month advance. e) Charge for depreciation is PKR 1,000/month and is included in the Fixed OH. f) Credit Sales are settled as follows; а. 10% in the month of sales b. 40% in the next month c. 40% in the next following month, and the balance represents bad debts. g) A dividend of PKR 10,000 is payable in June. h) Capital expenditure for buying a plant was incurred on 28th February of PKR 50,000. i) On March 1, we will buy an equipment on lease and its payment will be done in monthly instalments of PKR 5000 each, 1st installment is made in advance on March 1. Month Cash Credit Credit Cash Salaries Fixed Manufacturing Sales Sales Purchases Purchases OH expenses 7000 10000 January February 50000 8500 5000 18000 11000 60000 20000 12000 6000 18000 11000 8000 March 40000 30000 12000 4000 19000 11000 9000 April May 60000 40000 15000 7000 19000 11000 10000 70000 35000 15000 8000 20000 11000 11000 June 75000 25000 10500 9000 20000 11000 12000 Required: a) Prepare Cash Budget for March, April and May.
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