AggravaLimited is currently preparing budgets for September to December. Its estimated sales figures in units are as follows: SeptemberOctoberNovemberDecemberSales (units)13,7946,7133,38119,210 Inventories at 31 August totalled15,378units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to21,639.Inventories will revert to the normal level on 31 December.Inventories will cost£4per unit until the end of October, when the price will increase to£6per unit, and suppliers allowAggravaLtd to pay in the month following an order. Other relevant information is that6,710units were bought in August. Requirement 1:PrepareAggravaLtd'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 31Requirement 1:AggravaLtd's sales budget (in units) is as follows:(Fill in the relevant cells with its corresponding figures.) SeptemberOctoberNovemberDecemberOpening inventories (A) Sales forecast (B) A - B = (C) Inventories purchase* (E - C) Closing inventories (E) * same as 'sales forecast' for each month except November and December, when inventories increase and then revert to normal.Requirement 2: Relevant information for the cash budget is as follows:(Fill in the relevant cells with its corresponding figures.) AugustSeptemberOctoberNovemberDecemberInventories purchased (units) (A) 13,7946,7139,64212,949Cost per unit (£) (B)44466Cost of inventories bought [A*B = (C)] Cash outflow (£) Requirement 3: The value of trade payables that would appear in the budgeted statement of financial position as at 31 December is (Type an integer.)

1. Aggrava Limited Inventory budget (in units) for the month of September, October, November…

Answered: Requirement 1: Prepare Aggrava Ltd's…

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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Aggrava

Limited is currently preparing budgets for September to December. Its estimated sales figures in units are as follows:

	September	October	November	December
Sales (units)	13,794	6,713	3,381	19,210

Inventories at 31 August totalled

15,378

units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to

21,639.

Inventories will revert to the normal level on 31 December.

Inventories will cost

£4

per unit until the end of October, when the price will increase to

£6

per unit, and suppliers allow

Aggrava

Ltd to pay in the month following an order. Other relevant information is that

6,710

units were bought in August.

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

Requirement 1:

Aggrava

Ltd's sales budget (in units) is as follows:

(Fill in the relevant cells with its corresponding figures.)

	September	October	November	December
Opening inventories (A)
Sales forecast (B)
A - B = (C)
Inventories purchase* (E - C)
Closing inventories (E)

* same as 'sales forecast' for each month except November and December, when inventories increase and then revert to normal.

Requirement 2: Relevant information for the cash budget is as follows:

(Fill in the relevant cells with its corresponding figures.)

	August	September	October	November	December
Inventories purchased (units) (A)		13,794	6,713	9,642	12,949
Cost per unit (£) (B)	4	4	4	6	6
Cost of inventories bought [A*B = (C)]
Cash outflow (£)

Requirement 3:

The value of trade payables that would appear in the budgeted statement of financial position as at 31 December is

(Type an integer.)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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