The Accounts Of The Sage 2008
Candidates should answer THREE questions
Students should answer any THREE questions
1.The following information relates to forecasts of activity for Lake plc.:
Sales
£000 Materials
£000 Wages
£000 Expenses
£000
August 3,000 1,200 700 400
September 3,000 1,200 700 450
October 3,200 1,300 800 450
November 3,400 1,400 900 475
December 3,400 1,400 900 475
Notes
(1) Half of sales are on credit and customers are allowed one month in which to pay.
(2) Wages are paid as they fall due. Suppliers of materials and expenses allow one month's credit.
(3) A payment of £3,500,000 for new fixed assets is to be made in November.
(4) The proceeds from the sale of land, amounting to £2,000,000, is to be received in December.
(5) The expected cash balance at 1st. August is £750,000.
(6) Lake plc. does not have a bank overdraft facility at present.
Required:
[a] Prepare a cash budget for the FOUR months to 31st. December (by month and in total). (60%)
[b] Discuss the significant features in the cash budget which you have calculated for Lake plc. (40%)
2.The following budget report has been prepared for the Canterford division of a large group of companies:
Canterford Division
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