The financial position as at 31st December, 2019 was as follows: EQUITY AND LIABILITIES GH¢ GH¢ Stated capital: Ordinary share [40,000 at GHC12.50 each] 500,000 Preference shares [20,000 at GHC8.00 each] 160,000 660,000 Long term capital 140,000 800,000 NON-CURRENT ASSETS Building and Land 400,000 Equipment 182,000 Motor Vehicles 48,000 630,000 CURRENT ASSETS Inventory 40,000 Accounts Receivables 20,000 Cash at bank 124,000 184,000 CURRENT LIABILITIES Accounts payable (14,000) 170,000 TOTAL ASSETS 800,000 Additional Information The Company has produced the following estimates: 1) The accounts payable figure of GH¢14,000 stated in the financial statement would be paid in January, 2020. The following credit purchases are settled a month after the month of purchase, after deducting two percent (2%) discount. GH¢ January 28,000 February 42,000 March 36, 000 April 45,000 May 41,000 June 37,000 2) Sales for January will be GH¢51,300 and will increase at the rate of 20% per month until March. In April, sales will rise to GH¢80,000 and this will rise by10% per month thereafter. Sales will be divided equally between cash and credit sales. Credit customers are expected to pay two months after the sales.70% of sales will be generated by sales agents who will receive 10% commission on sales. The commission is payable one month after the sales. 3) The company intends to purchase further equipment in August for GH¢45,000. However, a deposit of 20% is supposed to be made in June. 4) Accounts receivable as at 31/12/2010 will be settled in January, 2020. 5) Other overheads will be GH¢6,500 per month for the first three months and GH¢8,400 thereafter. Wages and salaries will be GH1¢6,000 per month. Both types of expense will be payable when incurred. 6) Depreciation is to be provided at the rate of 10% per annum on land and building and 20% per annum on equipment (depreciation has not been included in the overheads mentioned above). Required: Prepare a monthly Cash Budget for Amasaman Ltd for January 2020 to June 2020.
The financial position as at 31st December, 2019 was as follows:
|
EQUITY AND LIABILITIES |
GH¢ |
GH¢ |
|
Stated capital: |
|
|
|
Ordinary share [40,000 at GHC12.50 each] |
|
500,000 |
|
|
|
160,000 |
|
|
|
660,000 |
|
Long term capital |
|
140,000 |
|
|
|
800,000 |
|
NON-CURRENT ASSETS |
|
|
|
Building and Land |
|
400,000 |
|
Equipment |
|
182,000 |
|
Motor Vehicles |
|
48,000 |
|
|
|
630,000 |
|
CURRENT ASSETS |
|
|
|
Inventory |
40,000 |
|
|
Accounts Receivables |
20,000 |
|
|
Cash at bank |
124,000 |
|
|
|
184,000 |
|
|
CURRENT LIABILITIES |
|
|
|
Accounts payable |
(14,000) |
170,000 |
|
TOTAL ASSETS |
|
800,000 |
Additional Information
The Company has produced the following estimates:
1) The accounts payable figure of GH¢14,000 stated in the financial statement would be
paid in January, 2020.
The following credit purchases are settled a month after the month of purchase, after
deducting two percent (2%) discount.
|
|
GH¢ |
|
January |
28,000 |
|
February |
42,000 |
|
March |
36, 000 |
|
April |
45,000 |
|
May |
41,000 |
|
June |
37,000 |
2) Sales for January will be GH¢51,300 and will increase at the rate of 20% per month until March. In April, sales will rise to GH¢80,000 and this will rise by10% per month thereafter.
Sales will be divided equally between cash and credit sales. Credit customers are expected to pay two months after the sales.70% of sales will be generated by sales agents who will receive 10% commission on sales. The commission is payable one month after the sales.
3) The company intends to purchase further equipment in August for GH¢45,000. However, a deposit of 20% is supposed to be made in June.
4)
5) Other
6)
Required:
Prepare a monthly
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