Prepare a Cash Budget for the period 1 November and 31 December 2018
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The members of Networx Ltd decide to prepare a
December 2018. The following information is available:
Actual Budgeted
August
R
September
R
October
R
November
R
December
R
Sales:
Cash
Credit
194 500
287 300
235 700
350 000
275 000
410 000
250 500
400 400
368 000
697 000
Purchases 510 000 490 000 495 000 520 000 680 000
Salaries & Wages 72 600 72 600 72 600 72 600 72 600
Sundry Expenses 17 800 18 400 22 000 22 600 25 700
Required:
Prepare a Cash Budget for the period 1 November and 31 December 2018
Step by step
Solved in 2 steps
- The members of Networx Ltd decide to prepare a Cash Budget for November and December 2018. The following information is available:Actual BudgetedAugust RSeptember ROctober RNovember RDecember RSales:CashCredit194 500287 300235 700350 000275 000410 000250 500400 400368 000697 000Purchases 510 000 490 000 495 000 520 000 680 000Salaries & Wages 72 600 72 600 72 600 72 600 72 600Sundry Expenses 17 800 18 400 22 000 22 600 25 700Additional 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. BAD DEBT - IGNORE2. The following discounts are allowed on sales: 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. Exclude depreciation5. Seventy-five (75%) of all purchases are on credit and paid within 30 days. The balance is paid…Use the information provided below to prepare the Cash Budget for October, November, and December2021. Provide separate monetary columns for each month.INFORMATION1. The following data and estimates are available for a project of Fego Limited for September toDecember 2021:September October November DecemberR R R RSales 130 000 110 000 120 000 140 000Wages 40 000 34 000 38 000 39 000Fixed overheads 16 000 16 000 16 000 16 000Variable overheads 16 000 13 000 15 000 17 000Materials purchases 17 000 14 000 16 000 18 0002. Sixty percent (60%) of the sales are expected to be for cash and the balance on credit. Creditcustomers usually pay in the month after the sale.3. Labour costs are paid for in the month in which they are incurred.4. Fixed overheads include R5 000 each month for depreciation and payment is made monthly.5. Variable overheads are paid for in the month after they are incurred.6. Direct materials are purchased by electronic funds transfers each month.7. The cash balance on 01…Please draft a budgeted receipt schedule from debtors for the period of 1 January 2023 to 30 June 2023. Month of 2023 Budgeted total sales: 1. January 140 000 2. February 132 000 3. March 128 000 4. April 115 000 5. May 120 000 6. June 150 000 Additional information: Total sales for September 2022, October 2022, November 2022 and December 2022 were R 120 000, R128 000 and R134 000 and R140 000 respectively. The goods sold on credit were 60% of actual sales. Customers will pay their debt as follows: . ⚫ 0% in the first month after the month of sale • 60% in the second month after the month of sale • 30% in the third month after the month of sale 10% in the fourth month after the month of sale
- Q.No. 2 Abuhatim LLC has given the following particulars. You are required to prepare a cash budget for the three months ending 31st December 2019 Months Sales Materials Wages Over heads (OMR) (OMR) (OMR) (OMR) 1900 August 20000 10200 3800 September 21000 10000 3800 2100 October 23000 9800 4000 2300 November 25000 10000 4200 2400 December 30000 10800 4500 2500 Credit terms are 1. Sales /Debtors 10% sales are on Cash , 50% of the credit sales are collected in next month and the balance in the following month 2. Creditors – materials 2 months Wages 1 month Over heads – 1 month 3. Cash balance on 1st October is expected to be Ro.8000 4. A machinery will be installed in August at a cost of RO.100000, the monthly instalment of RO.5000 is payable from October onwards 5. Dividend at 10% on preference share capital RO.300,000 will be paid on 1st December 2019 6. Advance to be received for the sale of vehicles RO.20000in December 7. Income tax tobe received in December RO.5000The following information pertains to Yoyo Projects for the three months ended 31 May 2020: Actual Budgeted March R April R May R Revenue (20% for cash and 80% on credit) 360 000 380 000 400 000 Purchases (10% for cash 90% on credit) 240 000 280 000 320 000 Salaries and wages paid 40 000 60 000 60 000 Cash expenses 24 000 28 000 32 000 Depreciation 2 000 2 000 2 000 Additional Information: It is expected that debtors will settle their accounts as follows: 20 % in the month of invoice 70% in the month after the month of invoice, and 5% in the second month after the month of invoice The remaining 5% is usually written off as bad Trade creditors are paid in the month after purchase at a discount of 5%. 50% of the salaries and wages are weekly wages. Since wages are paid weekly, usually 10% of the wages are paid in the month following the month in which they were Expenses are paid as they The favourable…Styles Abuhatim LLC has given the following particulars. You are required to prepare a cash budget for the three months ending 31st December 2019 Months Sales Materials Wages ( OMR) Over heads (OMR) (OMR) (OMR) August September October 20000 10200 3800 1900 21000 10000 3800 2100 23000 9800 4000 2300 November 25000 10000 4200 2400 December 30000 10800 4500 2500 Credit terms are 1.. Sales /Debtors 10% sales are on Cash, 50% of the credit sales are collected in next month and the balance in the following month 2. Creditors- materials 2 months Wages 1 month -1 month Overheads 3. Cash balance on 1st October is expected to be Ro.8000 4. A machinery will be installed in August at a cost of RO.100000, the monthly instalment of RO.5000 is payable from October onwards 5. Dividend at 10% on preference share capital RO.300,000 will be paid on 1* December 2019 6. Advance to be received for the sale of vehicles RO.20000in December 7. Income tax to be received in December RO.5000
- 7.3 Shown below are the totals from 2018 period budgets. Revenue budget Materials usage from production budget Labor cost budget Manufacturing overhead budget General and administrative budget Capital expenditure budget P100,000 15,000 20,000 20,000 30,000 20,000 32 How Work-in-Progress Inventories: Beginning of 2018 End of 2018 ndilet b rsM x) 1E valM 10,000 lsa 5,000 PLS Finished Goods Iventory: Beginning of 2018 End of 2018 Pla 15,000 10,000 Tax Rate 40% hen dees20 oldibsllonU Instructions: nongt od Prepare a forecasted Income Statement for the year. bas sldigilgonREQUIRED Use the information given below to answer the following questions: Prepare the Cash Budget for January, February and March Comment on the cash position of the company for the budgeted INFORMATION Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are as follows: Current assets R Accounts receivable 1 300 000 Bank 235 000 Current liabilities Accounts payable (for material purchases) 95 000 Other current liabilities 700 000 The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): The sales manager anticipates the following credit sales: January February March 2 160 pallets 2 340 pallets 2 250 pallets The bricks are sold at a constant price of R500 per pallet. Ten percent (10%) of the sales are for cash and the rest is on credit. Debtors…Shrek and Fiona Company, manufacturer of a single product, is preparing their annual budget for 2021: Requirements:1. Formulate Projected Financial Statements (As of December 31, 2021)a. Budgeted Cost of Goods Manufacturedb. Budgeted Income Statementc. Budgeted Balance Sheet
- The following information pertains to Omega Projects Ltd for the three months ended 31 December 2020. Actual Budgeted October November DecemberRevenue (20% for cash and 80% on credit) R360 000 R380 000 R400 000Purchases (10% for cash 90% on credit) R240 000 R280 000 R320 000Salaries and wages paid R40 000 R60 000 R60 000Cash expenses R24 000 R28 000 R32 000Depreciation R2 000 R2 000 R2 000 Additional information:1. It is expected that debtors will settle their accounts as follows:• 20% in the month of invoice• 70% in the month after the month of invoice, and• 5% in the second month after the month of invoice.• The remaining 5% is usually written off as bad debts.2.…Prepare a Budgeted Statement of Financial Position as at 31 December 2022 using the below information: Statement of comprehensive income for the year ended 31 December 2021Sales 10 000 000Cost of sales (5 750 000)Gross profit 4 250 000Variable selling and administrative expenses (1 500 000)Fixed selling and administrative expenses (500 000)Net profit 2 250 000 Statement of financial position as at 31 December 2021ASSETSNon-current assets 800 000Property, plant and equipment 800 000Current assets 3 400 000Inventories 1 600 000Accounts receivable 600 000Cash 1 200 000 4 200…Using a separate columnar worksheet or Excel worksheet, prepare a Cash Budget by month for the quarter ending September 30, 2021, from the following data obtained from the CONSCIOÜNESS Company. Support your solution with schedules of estimated receipts and payments. August P 16,000 150,000 July September Cash Sales P 12,000 P 18,000 Credit Sales Purchases 110,000 120,000 90,000 120,000 110,000 Operating expenses Interest expense 15,000 18,000 16,000 2,000 Credit sales are collected 50% in the month of sales, 40% on the month following, 8% in the second month following and 2% uncollectible. Credit sales for May and June are expected to be P100,000 and P90,000, respectively. Purchases of merchandise, all on account, are paid 60% in the month of purchase and 40% in the month following. Purchases for June are estimated at P80,000. Expenses include depreciation of P2,000 monthly, and are paid in the month incurred. Cash balance on June 30, 2021.
