16


BUDGETING Sample Solution 500,000 @ 20% = 100,000 less 2% 500,000 @ 80% @ 50%


(a)


Receipts Cash Sales


Credit Sales 1 Credit Sales 2


Payments Purchases 1 Wages


Variable Overheads Fixed Overheads Equipment Interest


Net Monthly Cash flow [1] Loan


Opening Cash Closing Balance


Cash Budget for Walsh Ltd from January to June January February March April


[1] 98,000 [1]


101,920 [1] [1] 200,000 [1]


105,840 [1] 208,000 [1] [1] 200,000 [1]


109,760 [1] 216,000 [1] 208,000 [1]


May


113,680 [1] 224,000 [1] 216,000 [1]


June


Total


117,600 646,800 232,000 1,080,000 224,000 848,000


98,000 301,920 513,840 533,760 553,680 573,600 2,574,800 [3] 30,000 [1]


44,500 40,000 400


[3]


[1] 250,000 [1] 30,000


[1] 150,000 [1] [3]


[1]


156,000 [1] 44,500


[1] 400 (178,980) [1] [1]


255,000 [1] 30,000


[1]


162,000 [1] 44,500


[1] 400 21,940 [1]


260,000 [1] 30,000


[1]


168,000 [1] 44,500


[1] 400 30,860 [1]


265,000 [1] 30,000


[1]


174,000 [1] 44,500


[1] 400 39,780


270,000 1,300,000 30,000 180,000 180,000 990,000 [1] 44,500 267,000 40,000 2,400


[1] 400


264,900 480,900 491,900 502,900 513,900 524,900 2,779,400 (166,900) [1] 40,000


- [1] (126,900) [1] (305,880) [1] (283,940) [1] (253,080) (213,300)


Fixed Overheads Subtract depreciation from overhead as depreciation is a non-cash expense. Depreciation


Variable Overheads January Do separate working for each month. Interest


[1] 48,700 (204,600) 40,000 -


(126,900) (305,880) (283,940) (253,080) (213,300) [4] (164,600) (164,600)


The month’s Closing Balance is next month’s Opening Balance.


16


256


Note


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