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April 6, 2015 at 5:12 am
Sir, I don’t find any clue of wages calculation . Can you please explain how does wages
figure arrived such as for the month of January 12000 & 3000 and so on?
John Moffat says
April 6, 2015 at 11:13 am
January’s wages are 16000
75% are paid in the current month, so 12,000 are paid in January
25% are paid in the following month, so 4,000 are paid in February,
February’s wages are 20,000
75% are paid in the current month, so 15,000 are paid in February.
25% are paid in the following month, so 5,000 are paid in March.
So the total cash paid in February is 4,000 + 15,000 = 19,000
It is the same workings for every month.
November 20, 2014 at 7:46 pm
Comment on your results in the light of the managing director’s comments and o?er advice……can you pls explain it in writing???As finding difficulty in understanding!!!
sibin thomas says
November 18, 2014 at 8:16 am
sir in the above example where the opening inventory of 15000
Why its not used the month of Nov ?
November 18, 2014 at 8:43 am
What opening inventory???
I assume that you have the Course Notes in front of you (otherwise there would be no point in watching the lecture) and there is no mention of any opening inventory (and it would be irrelevant anyway since the questions tells us the purchases each month).
(The $15,000 in the question is the opening cash balance – i.e. the cash at the start of January – and this is dealt with.)
November 18, 2014 at 3:43 pm
its not mentioned that the opening cash is for the month of jan
November 18, 2014 at 3:57 pm
True – it is not mentioned directly. However, since we are asked for a cash budget for Jan, Fed, Mar, it is reasonable to assume that it the opening balance for the period in question. (And if it was the opening balance at the beginning of November, then the question would be impossible)
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