Thorne Estates Limited advertises and sells residential property on behalf of its customers. The company has been in business for only a short time and is preparing a cash budget for the first four months of 2021. Expected sales of residential properties are as follows: 2020 Dec - 10 Units sold 2021 Jan - 10 Units sold 2021 Feb - 15 Units sold 2021 March - 25 Units sold 2021 Apr - 30 Units sold The average price of each property is £180,000 and Thorne Estates charges a fee of 3% of the value of each property sold. Thorne Estates receives a 1% in the month of sale and the remaining 2% in the month after sale. The company has nine employees who are paid on a monthly basis. The average salary per employee is £35,000 per year. If more than 20 properties are sold in a given month, each employee is paid in that month a bonus of £140 for each additional property sold. Variable expenses are incurred at the rate of 0.5% of the value of each property sold and these expenses are paid in the month of sale. Fixed overheads of £4,300 per month are paid in the month in which they arise. Thorne Estates pays interest every three months on a loan of £200,000 at a rate of 6% per year. The last Interest payment in each year is paid in December. Rent of £42,000 will fall due at the end of May. An outstanding tax liability of £95,800 is due to be paid in April. In the same month, Thorne Estates intends to dispose of surplus vehicles, with a net book value of £15,000 for £20,000. The cash balance at the start of January 2021 is expected to be a deficit of £40,000. Question : Could you please help me and prepare a monthly cash budget for the FOUR months from 1st Jan to 30 April 2021.
Thorne Estates Limited advertises and sells residential property on behalf of its customers. The company has been in business for only a short time and is preparing a cash budget for the first four months of 2021. Expected sales of residential properties are as follows:
2020 Dec - 10 Units sold
2021 Jan - 10 Units sold
2021 Feb - 15 Units sold
2021 March - 25 Units sold
2021 Apr - 30 Units sold
The average price of each property is £180,000 and Thorne Estates charges a fee of 3% of the value of each property sold. Thorne Estates receives a 1% in the month of sale and the remaining 2% in the month after sale.
The company has nine employees who are paid on a monthly basis. The average salary per employee is £35,000 per year.
If more than 20 properties are sold in a given month, each employee is paid in that month a bonus of £140 for each additional property sold.
Variable expenses are incurred at the rate of 0.5% of the value of each property sold and these expenses are paid in the month of sale. Fixed overheads of £4,300 per month are paid in the month in which they arise.
Thorne Estates pays interest every three months on a loan of £200,000 at a rate of 6% per year. The last Interest payment in each year is paid in December.
Rent of £42,000 will fall due at the end of May.
An outstanding tax liability of £95,800 is due to be paid in April. In the same month, Thorne Estates intends to dispose of surplus vehicles, with a net book value of £15,000 for £20,000.
The cash balance at the start of January 2021 is expected to be a deficit of £40,000.
Question : Could you please help me and prepare a monthly cash budget for the FOUR months from 1st Jan to 30 April 2021.
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