Question 3 Gafa Ltd have budgeted the following figures for the second half of 2009: Month July August September October November December (ii) (iii) The following information is also available: (iv) (v) Materials purchased £ (vi) 43,000 37,000 33,000 39,000 32,000 30,000 Wages (1) Material purchases are paid TWO (2) months in arrears. £ 10,000 9,800 9,600 9,400 9,200 9,000 Overheads £ Required: 16,000 15,900 15,800 15,700 15,600 15,500 Overheads are paid in the month they are incurred. 70% of wages are paid in the month the work is performed, and the remainder one month in arrears. (vii) Cash sales are £2,000 a month. Credit sales £ 88,000 84,000 80,000 76,000 72,000 68,000 Debtors should pay one month in arrears, but only 60% pay on time, the other 40% pay one month later. A car is to be purchased in December 2009 with a cost of £30,000. Half of the cost of the car will be paid in December and the remainder in January 2010. Estimated depreciation on the car for December will be £500. The bank account at 30th September 2009 is overdrawn by £50,000. Prepare the cash budget for the months of October, November and December 2009.

Question 3 Gafa Ltd have budgeted the following figures for the second half of 2009: Month July August September October November December (ii) (iii) The following information is also available: (iv) (v) Materials purchased £ (vi) 43,000 37,000 33,000 39,000 32,000 30,000 Wages (1) Material purchases are paid TWO (2) months in arrears. £ 10,000 9,800 9,600 9,400 9,200 9,000 Overheads £ Required: 16,000 15,900 15,800 15,700 15,600 15,500 Overheads are paid in the month they are incurred. 70% of wages are paid in the month the work is performed, and the remainder one month in arrears. (vii) Cash sales are £2,000 a month. Credit sales £ 88,000 84,000 80,000 76,000 72,000 68,000 Debtors should pay one month in arrears, but only 60% pay on time, the other 40% pay one month later. A car is to be purchased in December 2009 with a cost of £30,000. Half of the cost of the car will be paid in December and the remainder in January 2010. Estimated depreciation on the car for December will be £500. The bank account at 30th September 2009 is overdrawn by £50,000. Prepare the cash budget for the months of October, November and December 2009.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 33E: A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent...

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