QUESTION 3Prepare the Cash Budget for a project of Zao Enterprises for the period 01 June to 31 August 2021.INFORMATIONThe following budgeted information was supplied by Zao Enterpises for one of its projects:1.A favourable bank balance of R50 000 is expected on 31 May 2021.2.Expected monthly sales are as follows:UnitsMay4 200June6 300July6 600August5 400The selling price is R160 per unit. All units produced are sold in the same month.3.Cash sales usually make up 60% of the total sales. The balance of the sales is on credit. Twenty percent (20%) ofthe debts are usually settled in the month of the sale for a 5% discount and the balance is collected in the monthafter the sale.4.Material purchases are expected to be as follows: RMay260 000June320 000July340 000August290 000Forty percent (40%) of the material purchases are for cash and a 10% cash discount is granted on thesepurchases. The balance is purchased on credit and is paid in the month after the purchase.Labour costs amount to R40 per unit and are paid in the month in which they are incurred.5.Manufacturing overheads are budgeted at R60 000 per month, of which R5 000 is depreciation on machinery.Manufacturing overheads are payable in the month in which they are incurred.6.Selling and administrative costs contain a fixed portion of R50 000 per month and a variable component of 20% ofthe monthly sales value (before any discounts allowed). These costs are paid by the end of the applicable month.7.8.Equipment with a cost price of R400 000 is to be purchased during June 2021. A deposit of 20% of the purchaseprice will be paid in the month of the purchase and the balance plus finance charges of R16 000 will be paid intwelve equal monthly instalments commencing July 2021.Ten percent (10%) of the sales value in excess of R600 000 will be invested monthly from July 2021.9.

Cash Budget:- A cash budget is helpful to determine the total cash flows of a firm for a specified…

QUESTION 3 Prepare the Cash Budget for a project of Zao Enterprises for the period 01 June to 31 August 2021. INFORMATION The following budgeted information was supplied by Zao Enterpises for one of its projects: 1. A favourable bank balance of R50 000 is expected on 31 May 2021. 2. Expected monthly sales are as follows: Units May 4 200 June 6 300 July 6 600 August 5 400 The selling price is R160 per unit. All units produced are sold in the same month. Cash sales usually make up 60% of the total sales. The balance of the sales is on credit. Twenty percent (20%) of the debts are usually settled in the month of the sale for a 5% discount and the balance is collected in the month after the sale. 3. 4. Material purchases are expected to be as follows:

QUESTION 3 Prepare the Cash Budget for a project of Zao Enterprises for the period 01 June to 31 August 2021. INFORMATION The following budgeted information was supplied by Zao Enterpises for one of its projects: 1. A favourable bank balance of R50 000 is expected on 31 May 2021. 2. Expected monthly sales are as follows: Units May 4 200 June 6 300 July 6 600 August 5 400 The selling price is R160 per unit. All units produced are sold in the same month. Cash sales usually make up 60% of the total sales. The balance of the sales is on credit. Twenty percent (20%) of the debts are usually settled in the month of the sale for a 5% discount and the balance is collected in the month after the sale. 3. 4. Material purchases are expected to be as follows:

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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