The management of Palind Ltd decide to prepare a Cash Budget for November and December. The following information is available: Sales: Cash Credit Purchases Actual August R 194 500 287 300 510 000 Salaries & Wages 72 600 Sundry Expenses 17 800 Additional information: September October R R 235 700 350 000 490 000 72 600 18 400 410 000 275 000 250 500 495 000 72 600 22 000 Budgeted November December R 1. Cash in respect of credit sales is collected as follows: • 50% within 30 days • 30% within 60 days . 15% within 90 days The balance is written off as irrecoverable. 2. The following discounts are allowed on sales: R 400 400 520 000 72 600 22 600 368 000 697 000 680 000 72 600 25 700 • 10% on cash sales • 7.5% on credit sales if accounts are settled within 30 days. 3. All salaries, wages and sundry expenses are paid in cash. 4. Sundry expenses include depreciation of R4 200 per month. 5. Seventy-five (75%) of all purchases are on credit and paid within 30 days. The balance is paid in cash. 6. A year-end bonus to employees totaling R20 000 will be paid in December. 7. The cash in the bank on 31 October was R44 500. Required: Prepare a Cash Budget for November and December using separate monetary columns. for each month.
The management of Palind Ltd decide to prepare a Cash Budget for November and December. The following information is available: Sales: Cash Credit Purchases Actual August R 194 500 287 300 510 000 Salaries & Wages 72 600 Sundry Expenses 17 800 Additional information: September October R R 235 700 350 000 490 000 72 600 18 400 410 000 275 000 250 500 495 000 72 600 22 000 Budgeted November December R 1. Cash in respect of credit sales is collected as follows: • 50% within 30 days • 30% within 60 days . 15% within 90 days The balance is written off as irrecoverable. 2. The following discounts are allowed on sales: R 400 400 520 000 72 600 22 600 368 000 697 000 680 000 72 600 25 700 • 10% on cash sales • 7.5% on credit sales if accounts are settled within 30 days. 3. All salaries, wages and sundry expenses are paid in cash. 4. Sundry expenses include depreciation of R4 200 per month. 5. Seventy-five (75%) of all purchases are on credit and paid within 30 days. The balance is paid in cash. 6. A year-end bonus to employees totaling R20 000 will be paid in December. 7. The cash in the bank on 31 October was R44 500. Required: Prepare a Cash Budget for November and December using separate monetary columns. for each month.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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.
Question
Transcribed Image Text:The management of Palind Ltd decide to prepare a Cash Budget for November and
December. The following information is available:
Sales:
Cash
Credit
Purchases
Salaries & Wages
Sundry Expenses
WY
Actual
August September October
R
194 500
287 300
510 000
72 600
17 800
R
235 700
350 000
490 000
72 600
18 400
R
275 000
410 000
495 000
72 600
22 000
Additional information:
1. Cash in respect of credit sales is collected as follows:
• 50% within 30 days
• 30% within 60 days
• 15% within 90 days
• The balance is written off as irrecoverable.
2. The following discounts are allowed on sales:
Budgeted
7. The cash in the bank on 31 October was R44 500.
November December
R
250 500
400 400
520 000
72 600
22 600
R
368 000
697 000
680 000
72 600
25 700
• 10% on cash sales
• 7.5% on credit sales if accounts are settled within 30 days.
3. All salaries, wages and sundry expenses are paid in cash.
4. Sundry expenses include depreciation of R4 200 per month.
5. Seventy-five (75%) of all purchases are on credit and paid within 30 days.
The balance is paid in cash.
6. A year-end bonus to employees totaling R20 000 will be paid in December.
Required:
Prepare a Cash Budget for November and December using separate monetary columns
for each month.
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