Please confirm that all of the following accounts are included in a cash budget:

Cash receipts (sales revenue)
Accounts payable (purchases)
Admin expenses (includes depreciation charge)
Selling expenses
Credit card charges
Capital expenditure (shopfront upgrade)
Tax payments
Loan - principle
Loan- interest

Thanks,

Parrot

Quote:

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Originally Posted by ParrotBird48516

Please confirm that all of the following accounts are included in a cash budget:

Cash receipts (sales revenue)
Accounts payable (purchases)
Admin expenses (includes depreciation charge)
Selling expenses
Credit card charges
Capital expenditure (shopfront upgrade)
Tax payments
Loan - principle
Loan- interest

Thanks,

Parrot

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Only you can decide what is included in accounts payable usually it includes a number of items not just inventory purchases

Basically you are trying to indentify those items which will have impact on the bank account.

I'm sure you are aware that depreciation is what is termed a non cash item and a loan would only be included in the month it is received

As I said before think but don't over think the problem

I seem to make a habit of that I guess! Am just keen to do well and understand the concepts the best I can... but over-thinking does do me in sometimes!

Thank you for your help as always. I had included depreciation in my calculations which significantly affected the business' cash flow. This will make them much more healthy.

You have helped save my sanity!

Sincere appreciation,

Parrot

Depreciation is not included in cash budget because it is non-cash item

Thank you smart_ruby... I have now subtracted the depreciation and the company looks much better. Appreciate your help.

Parrot

Quote:

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Originally Posted by smart_ruby

Depreciation is not included in cash budget because it is non-cash item

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smart_ruby

I have now subtracted depreciation from the cash budget and it looks much better.

However, can you please confirm if this depreciation amount is included in the budgetd income statement? I understand that depreciation expenses are included in the actual income statement and accumulated depreciation is in the balance sheet. We have been provided monthly admin expenses, the values of which are inclusive of depreciation (not specific if expense or accumulated?) - quite a large proportion.

Does this full value need to go into the budgeted income statement or do I subtract it from the total admin expense and use the adjusted figure?

Thank you,

Parrot

Parrot what is a budget if not a projection of what an income statement will look like at a future date therefore all items that would ordinarily be found in an income statement will be found in a budget

I have a feeling you are winging it and not reading your text