In the late June of each year, BOS Global Ltd prepares a cash budget for the next 6 months. The entity’s management wishes to prepare a cash budget in order to assess its likely requirements for short-term funds. Actual sales for May, and estimated sales for June, and for the next 7 months are as follows: Months Sales Revenues (Actual and Estimates) [GHS] Months Sales Revenues (Actual and Estimates) [GHS] May 20,000 September 50,000 June 28,000 October 94,000 July 24,000 November 74,000 August 26,000 December 52,000 January 40,000 Approximately 25 per cent of sales are for cash and 75 per cent are on credit. Past experience has shown that two-third of all credit sales are collected in the month immediately following the month of sale, and the remaining one-third is collected in the second month following the sales. No discount is given. BOS Global Ltd follows a policy of basing its purchase on estimated sales. Purchases are 70 per cent of the following month’s estimated sales. The policy of the company is to ensure that the goods needed in each month are acquired and paid for in that same month. Other cash outflows in connection with monthly salaries are expected to be: Months Monthly Salaries (Estimates) [GHS] Months Monthly Salaries (Estimates) [GHS] July 7,400 October 11,000 August 7,450 November 7,800 September 9,100 December 7,150 please answer within the format by providing formula the detailed working Please provide answer in text (Without image) Please provide answer in text (Without image) Please provide answer in text (Without image) At the beginning of July, the company is expected to have GHS 8,400 credit balance in its bank account. Required: Prepare a monthly cash budget for BOS Global Ltd for the six (6) months period, ending December.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
QUESTION 2
In the late June of each year, BOS Global Ltd prepares a
Actual sales for May, and estimated sales for June, and for the next 7 months are as follows:
| Months | Sales Revenues (Actual and Estimates) [GHS] | Months | Sales Revenues (Actual and Estimates) [GHS] | |
| May | 20,000 | September | 50,000 | |
| June | 28,000 | October | 94,000 | |
| July | 24,000 | November | 74,000 | |
| August | 26,000 | December | 52,000 | |
| January | 40,000 |
Approximately 25 per cent of sales are for cash and 75 per cent are on credit. Past experience has shown that two-third of all credit sales are collected in the month immediately following the month of sale, and the remaining one-third is collected in the second month following the sales. No discount is given.
BOS Global Ltd follows a policy of basing its purchase on estimated sales. Purchases are 70 per cent of the following month’s estimated sales. The policy of the company is to ensure that the goods needed in each month are acquired and paid for in that same month. Other
| Months | Monthly Salaries (Estimates) [GHS] | Months | Monthly Salaries (Estimates) [GHS] | |
| July | 7,400 | October | 11,000 | |
| August | 7,450 | November | 7,800 | |
| September | 9,100 | December | 7,150 |
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
At the beginning of July, the company is expected to have GHS 8,400 credit balance in its bank account.
Required:
Prepare a monthly cash budget for BOS Global Ltd for the six (6) months period, ending December.
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