North Point Ltd’s management has and estimated overdraft of $10,000 at 1 June. T
ID: 2571342 • Letter: N
Question
North Point Ltd’s management has and estimated overdraft of $10,000 at 1 June. The following information has been taken from budgets for June.
$
Cash Sales
53,000
Credit Sales
92,000
Wages (gross)
22,000
Rent
6,000
Credit purchases of trading stock
18,000
Cash purchases of trading stock
8,000
Loss on sales of asset
3,000
60% of sales credit sales are collected in the month of sale and 40% in the following month.
Credit sales for May was budgeted for $80,000
90% of credit purchases are paid in the month of purchase and 10% in the following month.
Credit purchases for May was budgeted for $22,000
Wages for May was budgeted for $15,000.
PAYG tax deductions are calculated at 20% of gross wages and paid to ATO in the following month of wages paid.
Assessment tasks
Prepare a cash budget for June. (Note: For simplicity ignore GST in your calculations).
Example Only:
XXXXXX Pty Ltd
Cash Budget
For the month of XXXX
Details
$
Receipts
Cash sales
Credit sales
July 10% x XXXX
August 90% x XXXXX
Subtotal
GST
Total Receipts
Payments
Cash purchase
Credit purchases
June 20% x XXXXX
July 80% x XXXX
Rent
GST
PAYG deductions
Wages
Total Payments
Increase in cash
Opening balance
Closing Balance
Note: the above suggested template is only an example, the months indicated under the Credit sales and Credit purchases need to be changed.
Cash Sales
53,000
Credit Sales
92,000
Wages (gross)
22,000
Rent
6,000
Credit purchases of trading stock
18,000
Cash purchases of trading stock
8,000
Loss on sales of asset
3,000
Explanation / Answer
Receipts Cash sales $53,000 Credit sales: May 40%×80,000 $32,000 June 60%×92000 $55,200 Subtotal $140,200 GST ××× Total receipts $140,200 Payments: Cash purchases $8,000 Credit purchases: May 10%×$22,000 $2,200 June 90%×18,000 $16,200 Rent $6,000 GST ×× PAYG deductions 20%×15,000(May) $3,000 Wages(22000×80%) $17,600 Total payments $53,000 Increase in cash $87,200 Opening balance -10,000 Closing balance $77,200Related Questions
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