Required: Prepare a monthly cash budget for BOS Global Ltd for the six (6) months period, ending December.
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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.
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- Relevant data from the operating budget of The Framers are: Other data: Capital assets were sold in quarter 1 and $8,000 was collected in quarter 1 and $500 collected in quarter 2. Dividends of $500 will be paid in May The beginning cash balance was $50,000 and a required minimum cash balance is $10,000. Prepare a cash budget for the first two quarters of the year.A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next years budget before the adjustment. After adjusting for the 3 percent inflation rate, what is the companys total budget for the selected items before taxes for next year? a. 858,150 b. 860,412 c. 810,971 d. 858,971A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?
- A. Discuss the purpose of the cash budget. B. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used?Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were sold in January for $10,000 and $4,500 in May. Dividends of $4,500 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the yearCASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2019 and 2020: Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses are 2,700 a month. Income tax payments of 63,000 are due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2019. b. Prepare monthly estimates of the required financing or excess fundsthat is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 1/30 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal, and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.
- please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) QUESTION 2 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…REQUIRED Use the information provided below to prepare the following for March and April 2024: 4.1 Debtors Collection Schedule 4.2 Cash Budget INFORMATION The following information was provided by BN Traders: 1. The bank balance on 28 February 2024 is expected to be R100 000 (unfavourable). The sales figures for the first four months of 2024 are expected to be as follows: 2 January March R1 500 000 R1 000 000 3. 4. 4.1 4.2 5. 6. 7. 8. 9. February R1 100 000 Cash sales usually make up 30% of the total sales. The balance of the sales is on credit. (Separate entries are required for cash sales and collections from credit sales.) Credit sales are normally collected as follows: 30% in the month of the sale, and these debtors are entitled to a 3% discount 65% in the month after the sale The rest is usually written off as bad debts. Purchases from February to April 2024 are expected to be as follows: February March R320 000 R350 000 Cash purchases Credit purchases April R1 200 000 R360 000…Question 3 The Plantd’ Company’s budgeted sales for the first quarter of 2020 are as follows: N$ January 400 000 February 320 000 March 480 000 Total 1 200 000 Credit sales are normally collected as follows: Percent (%) In the month of sale 50 The month following the sale 30 The second month following the month of the sale 20 Total…
- Question 1 From the following information prepare a monthly cash budget for the three months ending 31st Dec.2020 Sales Materials Wages Production Admin. Selling, etc Month (RM) (RM) (RM) (RM) (RM) June 6,000 3,600 1,300 450 320 July 6,500 4,000 1,500 450 320 Aug. 7,000 4,800 1,500 500 350 Sep. 7,500 4,500 1,500 600 350 Oct. 8,000 4,600 1,600 600 400 Nov. 8,500 5,000 1,800 700 400 Dec. 9,000 5,200 2,000 700 450 Credit terms Sales 3 months to debtors. 10% of sales are on cash. On an average, 50% of credit sales are paid on the due dates while the other 50% are paid in the month following Creditors for material – 2 months. Lag in payment Wages. 1/4 month, overheads 1/2 month. Other information Plant and Machinery to be installed in Aug. at a cost of RM30,000. It will be paid for by monthly installments of RM1,000 each from 1st Oct.; Preference share dividend @ 6% on RM100,000 are to be paid on 1st Dec. Calls on 500 equity shares @ RM2 per share expected on 1st November; Dividends from…QUESTION 4: CASH BUDGET JL is preparing its cash budget for the next three quarters of the 2019 financial year. The following data have been extracted from the operating budgets: Quarter 1 Quarter 2 Quarter 3 R R R Sales revenue 500 000 450 000 480 000 Direct material purchases 138 000 151 200 115 600 Additional information: a) JL sells 20% of its goods for cash. It is estimated that 70% of all credit sales is received within the quarter in which the sales are made; and 30% of all credit sales is received in the following quarter. It is estimated that trade receivables will be R125 000 at the start of Quarter 1. No credit loss is anticipated. b) All direct material purchases are made on credit. It is estimated that 50% of all direct material purchases are paid in the quarter of purchase; the remaining 50% is paid in the quarter following the quarter of purchase. It is estimated that the amount owning for direct material purchases will be R60 000 at the beginning of Quarter 1. c) JL…Question6: Company wants to prepare a cash budget for May, June, and July. At the end of every month the cash balance will be Rs. 20,000. Determine whether borrowing will be necessary during the period, and if it is, when and for how much. The following information has been provided: As of April 30, the firm had a balance of Rs. 20,000 in cash. Actual Sales Rs. Forecast Sales Rs. January 50,000 May 70,000 February 50,000 June 80,000 March 60,000 July 100,000 April 60,000 August 100,000 50% of total sales are for cash. The remaining will be collected equally during the following two months. Cost of purchases are 70% of sales, 90% of this cost is paid during the first month after incurrence and the remaining 10% is paid in the following month. Dividend of Rs. 10,000 declared on June will be paid in the month of July. Company plans to sell machinery costing Rs. 10,000 at an expected gain of Rs. 5,000 in June. Purchase plant…