Cash sales Debtors: current Debtors: 30 days Debtors: 60 days Cash purchases Cre
ID: 2488834 • Letter: C
Question
Cash sales
Debtors: current
Debtors: 30 days
Debtors: 60 days
Cash purchases
Creditors: current
Creditors: 30 days
Creditors: 60 days
Net cash flow
Relevant information:
Jan Feb Mar Apr
Sales $100,000 $110,000 $115,000 $110,000
Purchases $64,286 $64,286 $61,429 $55,714
* Sales: 25% cash; 75% credit
* Credit sales collection estimates: 10% current month
40% 30 days
22% 60 days
3% lost
* Purchases: 40% cash, 60% credit
* Credit purchase payment policy: 10% current month
50% 30 days
* Expenses: cash equals 11% of that month’s sales
* The business commenced operations on 1 January this year.
Complete the cash budget for the months January to March.
Receipts: January February March AprilCash sales
Debtors: current
Debtors: 30 days
Debtors: 60 days
Payments:Cash purchases
Creditors: current
Creditors: 30 days
Creditors: 60 days
Net cash flow
Explanation / Answer
Cash Budget has been asked only from January to March, but for better understanding, we have provided for April also.
CASH BUDGET PARTICULARS JANUARY FEBRUARY MARCH APRIL RECEIPTS Opening Cash Balance 0 ($8143) ($6029) $24713.50 Cash Sales $25000 $27500 $28750 $27500 Debtors: Current $10000 $11000 $11500 $11000 Debtors: 30 Days $40000 $44000 $46000 Debtors: 60 Days $22000 $24200 PAYMENTS Cash Purchases $25714.40 $25714.40 $24571.60 $22285.60 Creditors: Current $6428.60 $6428.60 $6142.90 $5571.40 Creditors: 30 Days $32143 $32143 $30714.50 Other Expenses $11000 $12100 $12650 $12100 Net Cash Flow ($8143) ($6029) $24713.50 $62742Related Questions
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