Prepare Tom’s cash budget for January to June 20X9. You are given the following data:
a. Annual staff salaries (including drawings of £9,600) will be £24,600 paid monthly;
b. New plant of £84,000 is required at start up; it must be paid for on 31st March X9;
c. The plant has an estimated life of 5 years and ABC use straight line depreciation;
d. Annual sales are estimated at £300,000; 20% of monthly sales is for cash, 40%
is received in the month following sales, and the balance two months later;
e. Stock levels at month end must be sufficient to cover next month’s sales; gross
profit mark up is 20% of sales, and suppliers will grant credit of 30 days;
f. Other operating overheads are £2,000 per month (including depreciation) payable monthly in arrears;
g. Capital introduced at start up amounts to £80,000;
If it's easier, you can send the answer to my email address josieyuen@hotmail.com
Many thanks.
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