Accounting Business Reporting for Decision Making

408 Accounting: Business Reporting for Decision Making

Required

Prepare a cash budget for the quarter ending 31 March 2018.

9.28  LO5

Vesty Travel Services plans to commence operations on 1 July 2018. The following data and

estimates relate to the three months ending 30 September 2018.

July August September

Initial capital

Fees charged (credit)

Fees received

Computer equipment (cash)

Administration

Advertising and marketing

Cash withdrawals

Rent

$27 750

10 212

5 772

7 659

1 221

2 775

1 332

1 776

$12 321

7 548

1 221

2 220

1 332

1 776

$16 095

11 322

1 221

1 332

1 332

1 776

Required

Prepare a monthly cash budget for the three months ending 30 September 2018.

9.29   LO4

Coconut Plantations Pty Limited produces and sells two types of coconut-based products: soaps

and candles. Jo Geter, the manager, is implementing a new marketing strategy in 2019. Actual

sales in 2018 were as follows:

Quarter ending Soaps (units) Candles (units)

31 March

30 June

30 September

31 December

6 364

8 181

8 695

10 435

2 727

5 454

6 667

9 167

Due to the change in sales strategy, Jo expects sales of both product to grow by 10 per cent in the

first two quarters of 2019. In the second two quarters of 2019 the sales of soaps and candles are

expected to grow by 15 per cent and 20 per cent respectively. The unit selling prices in 2018 were:

Soaps $40 and Candles $25. The unit selling prices will remain constant in 2019.

Required

Prepare a sales budget for 2019.

9.30   LO4, 6

Garden Sculptures presents the following data relating to the expected operations for the months

of January to March 2018.

January February March

Credit services provided

Receipts from accounts receivable

Cash services

Cash received from the sale of old

equipment

Salaries and wages paid

Depreciation on equipment

Payment for supplies

Cash purchase of new equipment

Administration costs

Credit purchase of supplies

$8 000

20 000

1 950

8 500

500

2 600

20 000

2 000

1 900

$12 000

30 000

2 250

2 000

8 500

500

3 500

2 000

2 150

$12 400

5 000

3 300

8 500

500

2 800

2 000

1 890

Required

a. Prepare a cash budget on a monthly basis for the three months ending March 2018. The cash

balance at 31 December 2017 was $25 000.

b. Explain how a variance report would help the owner of Garden Sculptures monitor the entity’s

cash position.