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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:Question 3
Gafa Ltd have budgeted the following figures for the second half of 2009:
Month
July
August
September
October
November
December
(ii)
(iv)
(v)
Materials
purchased
£
The following information is also available:
(vi)
43,000
37,000
33,000
39,000
32,000
30,000
Wages
£
10,000
9,800
9,600
9,400
9,200
9,000
(i) Material purchases are paid TWO (2) months in arrears.
Overheads
Required:
£
16,000
15,900
15,800
15,700
15,600
15,500
Overheads are paid in the month they are incurred.
(vii) Cash sales are £2,000 a month.
70% of wages are paid in the month the work is performed, and the remainder one month
in arrears.
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.
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