Use the information below to answer question 1 to 22. The financial controller of BOE Ltd. is gathering data to prepare a cash budget for the second quarter of 2018. The following information is available. a) Sales for the first six months of the year are as follows: January February March 23,000 30,000 50,000 57,000 60,000 56,000 April May June a) 40% of all sales are cash sales. b) Of credit sales, 50% are collected in the month of sales and the remaining 50% collected the following month. c) The cost of raw materials equals 35% of each month's sales. 50% of raw materials are paid for in the month of purchase. The remaining 50% are paid in the following month. d) Wages total ¢5,500 per month and are paid for in the month incurred. e) Operating expenses per month totalled ¢16,800 of which ¢2,500 is depreciation and ¢300 is expiration of prepaid insurance premium (the annual premium of ¢3,600 paid in Jan 1). f) Dividend of ¢7,000 declared in March 31 will be paid on April 20. g) Old equipment will be sold in April 4 for ¢1,300. h) On April 13, new equipment will be purchased for ¢8,400. i) The company will maintain a minimum cash balance of¢10,000 from April. i) The cash balance on March 31 amounted to ¢1,350.

Use the information below to answer question 1 to 22. The financial controller of BOE Ltd. is gathering data to prepare a cash budget for the second quarter of 2018. The following information is available. a) Sales for the first six months of the year are as follows: January February March 23,000 30,000 50,000 57,000 60,000 56,000 April May June a) 40% of all sales are cash sales. b) Of credit sales, 50% are collected in the month of sales and the remaining 50% collected the following month. c) The cost of raw materials equals 35% of each month's sales. 50% of raw materials are paid for in the month of purchase. The remaining 50% are paid in the following month. d) Wages total ¢5,500 per month and are paid for in the month incurred. e) Operating expenses per month totalled ¢16,800 of which ¢2,500 is depreciation and ¢300 is expiration of prepaid insurance premium (the annual premium of ¢3,600 paid in Jan 1). f) Dividend of ¢7,000 declared in March 31 will be paid on April 20. g) Old equipment will be sold in April 4 for ¢1,300. h) On April 13, new equipment will be purchased for ¢8,400. i) The company will maintain a minimum cash balance of¢10,000 from April. i) The cash balance on March 31 amounted to ¢1,350.

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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