Requirement 1: Prepare Aggrava Ltd's inventories budget (in units) for September to December. Requirement 2: Prepare the information relevant to inventories purchases that would appear in the cash budget for the period. Requirement 3: State the value of trade payables that would appear in the budgeted statement of financial position as at 31
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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September
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October
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November
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December
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Sales (units)
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13,794
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6,713
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3,381
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19,210
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Requirement 1:
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Prepare
Aggrava
Ltd's inventories budget (in units) for September to December. |
Requirement 2:
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Prepare the information relevant to inventories purchases that would appear in the
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Requirement 3:
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State the value of trade payables that would appear in the budgeted
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September
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October
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November
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December
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Opening inventories (A)
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Sales
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A - B = (C)
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Inventories purchase* (E - C)
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Closing inventories (E)
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August
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September
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October
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November
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December
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Inventories purchased (units) (A)
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13,794
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6,713
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9,642
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12,949
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Cost per unit (£) (B)
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4
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4
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4
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6
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6
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Cost of inventories bought [A*B = (C)]
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