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  • May 13, 2012, 11:29 PM
    pm1991
    schedule of cash collections simple format
    Broadbeach Ltd requires a cash budget for the month of October. The company’s financial officer has
    provided the following information and assumptions:
    i. The 1 October cash balance is expected to be $ 55,750.
    ii. All sales are on account. Credit sales are collected over a three month period with 65% collected
    in the month of sale, 30% in the month following sale, and 5% in the second month following sale.
    iii. Actual sales for August and September were $ 85,500 and $ 78,100 respectively. October’s sales
    are budgeted at $ 99,500.
    iv. Marketable securities are expected to be sold for $ 54,000 during the month of October.
    v. The financial officer estimates that direct materials totalling $ 75,300 will be purchased during
    October. 50% of a month’s raw materials purchases are paid for in the month of purchase with the
    remaining 50% paid for in the following month. Accounts payable for September purchases total $
    22,900 which will be paid in October.
    vi. October direct labour costs are expected to be $ 40,000.
    vii. Manufacturing overhead is estimated to be 50% of direct labour costs, noting that approximately
    10% of the manufacturing overhead is depreciation on factory buildings and equipment.
    viii. Selling and administration expenses are budgeted at $ 48,000 for October. $22,000 of this amount
    is for depreciation.
    ix. During October, Broadbeach Ltd plans to purchase a new delivery van costing $45,000. The
    company will pay cash for the van.
    x. Broadbeach Ltd owes $ 12,000 in income tax and this will be paid in October.
    xi. Broadbeach Ltd must maintain a minimum cash balance of $ 10,000 . To bolster the cash balance
    as needed, an open line of credit is available from the bank at 8% per annum interest.
    Required: Prepare the following for Broadbeach Ltd:
    a) A schedule of cash collections. (5 marks)
    b) A schedule of cash payments for raw materials. (5 marks)
    c) A cash budget for the month of October. Indicate any borrowing that will be necessary during the
    month. (10 marks)
  • May 14, 2012, 12:14 AM
    paraclete
    Quote:

    Originally Posted by pm1991 View Post
    Broadbeach Ltd requires a cash budget for the month of October. The company’s financial officer has
    provided the following information and assumptions:
    i. The 1 October cash balance is expected to be $ 55,750.
    ii. All sales are on account. Credit sales are collected over a three month period with 65% collected
    in the month of sale, 30% in the month following sale, and 5% in the second month following sale.
    iii. Actual sales for August and September were $ 85,500 and $ 78,100 respectively. October’s sales
    are budgeted at $ 99,500.
    iv. Marketable securities are expected to be sold for $ 54,000 during the month of October.
    v. The financial officer estimates that direct materials totalling $ 75,300 will be purchased during
    October. 50% of a month’s raw materials purchases are paid for in the month of purchase with the
    remaining 50% paid for in the following month. Accounts payable for September purchases total $
    22,900 which will be paid in October.
    vi. October direct labour costs are expected to be $ 40,000.
    vii. Manufacturing overhead is estimated to be 50% of direct labour costs, noting that approximately
    10% of the manufacturing overhead is depreciation on factory buildings and equipment.
    viii. Selling and administration expenses are budgeted at $ 48,000 for October. $22,000 of this amount
    is for depreciation.
    ix. During October, Broadbeach Ltd plans to purchase a new delivery van costing $45,000. The
    company will pay cash for the van.
    x. Broadbeach Ltd owes $ 12,000 in income tax and this will be paid in October.
    xi. Broadbeach Ltd must maintain a minimum cash balance of $ 10,000 . To bolster the cash balance
    as needed, an open line of credit is available from the bank at 8% per annum interest.
    Required: Prepare the following for Broadbeach Ltd:
    a) A schedule of cash collections. (5 marks)
    b) A schedule of cash payments for raw materials. (5 marks)
    c) A cash budget for the month of October. Indicate any borrowing that will be necessary during the
    month. (10 marks)

    10 marks are no use to me, show us your efforts

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