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    BUDGETING

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    GARUIS MELI
    The firm forecasted sales and purchases for Q1 2015. Sales were 60% cash and 40% credit. Purchases were made by cash. Additional monthly expenses were 150,000 FCFA and capital of 5,000,000 FCFA was contributed in January. The VAT rate was 19.25%. The extract from TIKENG's books on June 30, 2001 showed cash, taxes payable, bills payable, and bills receivable balances. The commercial director provided budgeted purchases and sales information for July to October 2001. Sales were collected within the month or following month. Purchases were paid 40% cash with the remainder on 60 day credit. Bills payable and receivable would be settled 25

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    BUDGETING

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    GARUIS MELI
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    The firm forecasted sales and purchases for Q1 2015. Sales were 60% cash and 40% credit. Purchases were made by cash. Additional monthly expenses were 150,000 FCFA and capital of 5,000,000 FCFA was contributed in January. The VAT rate was 19.25%. The extract from TIKENG's books on June 30, 2001 showed cash, taxes payable, bills payable, and bills receivable balances. The commercial director provided budgeted purchases and sales information for July to October 2001. Sales were collected within the month or following month. Purchases were paid 40% cash with the remainder on 60 day credit. Bills payable and receivable would be settled 25

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    The firm forecasted sales and purchases for Q1 2015. Sales were 60% cash and 40% credit. Purchases were made by cash. Additional monthly expenses were 150,000 FCFA and capital of 5,000,000 FCFA was contributed in January. The VAT rate was 19.25%. The extract from TIKENG's books on June 30, 2001 showed cash, taxes payable, bills payable, and bills receivable balances. The commercial director provided budgeted purchases and sales information for July to October 2001. Sales were collected within the month or following month. Purchases were paid 40% cash with the remainder on 60 day credit. Bills payable and receivable would be settled 25

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    10 views2 pages

    BUDGETING

    Uploaded by

    GARUIS MELI
    The firm forecasted sales and purchases for Q1 2015. Sales were 60% cash and 40% credit. Purchases were made by cash. Additional monthly expenses were 150,000 FCFA and capital of 5,000,000 FCFA was contributed in January. The VAT rate was 19.25%. The extract from TIKENG's books on June 30, 2001 showed cash, taxes payable, bills payable, and bills receivable balances. The commercial director provided budgeted purchases and sales information for July to October 2001. Sales were collected within the month or following month. Purchases were paid 40% cash with the remainder on 60 day credit. Bills payable and receivable would be settled 25

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    © All Rights Reserved
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    of 2

    BUDGETING-CASH BUDGET

    QUESTION 1
    A newly created firm forecasted sales and purchases for the first
    quarter of 2015 as follows:
    Months Jan 2015 Feb 2015 Mar 2015
    Sales (VAT 2,000,000 4,000,000 8,000,000
    exclusive)
    Purchases 3,000,000 2,500,000 2,000,000
    ( VAT
    exclusive)

    Additional information:
    - Purchases are made by cash.
    - Sales are made 60% by cash and 40% on credit for one month.
    - Sundry monthly expenses amount to 150,000 FCFA
    - Capital of 5,000,000 FCFA is contributed by cash on January
    2015 by shareholders
    - The VAT for each month is levied at the rate of 19.25%
    Required
    Establish for the quarter of 2015,
    a) The VAT budget
    b) The cash budget

    QUESTION 2
    The following extract was made from the books of TIKENG on the
    30th June 2001:
    - State taxes 1,350,000FCFA
    - NSIF 180,000FCFA
    - Bills payable 2,760,000FCFA
    - Bills receivables 1,849,000FCFA
    - Cash 1,948,000FCFA
    Budgeted information applied by the commercial director
    Description July August September October
    Purchase 1,450,000 1,000,000 1,200,000 1,000,000
    Sales 1,975,000 2,500,000 3,000,000 2,900,000
    Additional information:
    - Sales are collected as follows: 65% within the month, 35%
    during the following month, but in October, 70% within the
    month and 30% within the next month.
    - Purchases are paid 40% by cash and the balance by bills of
    exchange due for 60days
    - The following balances: bills payables and bills receivables will
    be settled by ¼ for each month starting from 1st august.
    - NSIF balance was to be paid in July.
    - Net salary paid monthly from July to September is
    165,000FCFA, but will rise to 195,000FCFA in October 2001
    - A loan of 5,300,000 FCFA will be obtained by TIKENG on 1st
    august
    - A new machine will be bought and the first instalment of
    2,400,000FCFA will be paid on October 1st 2001.
    - The monthly repayment of loan of 190,000FCFA will start on 1st
    September
    - All other monthly expenses stand at 210,000FCFA
    - TIKENG will pay his taxes in July.
    Required:
    a) Prepare a cash budget for TIKENG for the budgetary period of
    the year 2001.

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