QUESTION 2In the late June of each year, BOS Global Ltd prepares a cash budget for the next 6 months. The entity's managementwishes to prepare a cash budget in order to assess its likely requirements for short-term funds.Actual sales for May, and estimated sales for June, and for the next 7 months are as follows:Months Sales Revenues (Actual and Estimates) [GHS]MonthsSales Revenues (Actual and Estimates) [GHS]20,00028,000July 24,000August 26,000September 50,000October 94,000November74,000December52,000January40,000Approximately 25 per cent of sales are for cash and 75 per cent are on credit. Past experience has shown that two-third ofall credit sales are collected in the month immediately following the month of sale, and the remaining one-third iscollected in the second month following the sales. No discount is given.MayJuneBOS Global Ltd follows a policy of basing its purchase on estimated sales. Purchases are 70 per cent of the followingmonth's estimated sales. The policy of the company is to ensure that the goods needed in each month are acquired andpaid for in that same month. Other cash outflows in connection with monthly salaries are expected to be:MonthsMonthly Salaries (Estimates) [GHS]MonthsMonthly Salaries (Estimates) [GHS]7,40011,000OctoberJulyAugust7,450September 9,100December 7,150At the beginning of July, the company is expected to have GHS 8,400 credit balance in its bank account.Required:Prepare a monthly cash budget for BOS Global Ltd for the six (6) months period, ending December.November 7,800

Details needed to draft the budget: > Sales are realised as - 25% in the month of sale - 50% in…

Answered: Required: Prepare a monthly cash budget…

Business

Accounting

Required: Prepare a monthly cash budget for BOS Global Ltd for the six (6) months period, ending 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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ll. Subject Accounting