The members of Networx Ltd decide to prepare a Cash Budget for November and December 2018. The following information is available: Actual Budgeted August R September R October R November R December R Sales: Cash Credit 194 500 287 300 235 700 350 000 275 000 410 000 250 500 400 400 368 000 697 000 Purchases 510 000 490 000 495 000 520 000 680 000 Salaries & Wages 72 600 72 600 72 600 72 600 72 600 Sundry Expenses 17 800 18 400 22 000 22 600 25 700 Additional information: 1. Cash in respect of credit sales is collected as follows: 50% within 30 days 30% within 60 days 15% within 90 days The balance is written off as irrecoverable. BAD DEBT - IGNORE 2. The following discounts are allowed on sales: 10% on cash sales 7.5% on credit sales if accounts are settled within 30 days. 3. All salaries, wages and sundry expenses are paid in cash. 4. Sundry expenses include depreciation of R4 200 per month. Exclude depreciation 5. Seventy-five (75%) of all purchases are on credit and paid within 30 days. The balance is paid in cash. 6. A year-end bonus to employees totalling R20 000 will be paid in December. 7. The cash in the bank on 31 October 2018 was R44 500. Required: Prepare a Cash Budget for the period 1 November and 31 December 2018
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.
The members of Networx Ltd decide to prepare a
December 2018. The following information is available:
Actual Budgeted
August
R
September
R
October
R
November
R
December
R
Sales:
Cash
Credit
194 500
287 300
235 700
350 000
275 000
410 000
250 500
400 400
368 000
697 000
Purchases 510 000 490 000 495 000 520 000 680 000
Salaries & Wages 72 600 72 600 72 600 72 600 72 600
Sundry Expenses 17 800 18 400 22 000 22 600 25 700
Additional information:
1. Cash in respect of credit sales is collected as follows:
50% within 30 days
30% within 60 days
15% within 90 days
The balance is written off as irrecoverable.
2. The following discounts are allowed on sales:
10% on cash sales
7.5% on credit sales if accounts are settled within 30 days.
3. All salaries, wages and sundry expenses are paid in cash.
4. Sundry expenses include depreciation of R4 200 per month. Exclude depreciation
5. Seventy-five (75%) of all purchases are on credit and paid within 30 days.
The balance is paid in cash.
6. A year-end bonus to employees totalling R20 000 will be paid in December.
7. The cash in the bank on 31 October 2018 was R44 500.
Required:
Prepare a Cash Budget for the period 1 November and 31 December 2018
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