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Hello , could you please help me with question 23.2 in MA Kit book?
Given below is the forecast statement of profit or loss for a business for the three months ending 31
December together with forecast statements of financial position at that date and also at the previous 30
September…Answer :
Workings
Sales receipts = 860 + 45 – 85 = 820
Purchase payments = 600 + 75 – 100 = 575
Overhead payments = 100 + 40 – 45 = 95Can you describe why we add 45 (September reciviable) and minus 85 (December reciviable)
I do not know which edition of the Revision Kit you are using, but question 23.2 in the current edition is not a question on budgeting and has none of the figures that you mention.
My version is FOR EXAMS FROM 1 SEPTEMBER 2019 TO 31 AUGUST 2020
This is all question:
Given below is the forecast statement of profit or loss for a business for the three months ending 31
December together with forecast statements of financial position at that date and also at the previous 30
September.FORECAST STATEMENT OF PROFIT OR LOSS
FOR THE THREE MONTHS ENDING 31 DECEMBER$’000
Revenue 860
Cost of sales (600)
Gross profit 260
Depreciation (20)
Overheads (100)
Profit from operations 140FORECAST STATEMENTS OF FINANCIAL POSITION
31 December 30 September
$’000 $’000 $’000 $’000Non-current assets 1,050 760
Current assets
Inventory 100 100
Receivables 85 45
Cash 10 10Total assets 1,245 915
Equity and liabilities
Equity share capital 600 600
Retained earnings 500 200
1100 800Current liabilities
Payables 100 75
Accruals of overheads 45 145 40 115Total equity and liabilities 1,245 915
Task 1
Calculate the actual cash receipts and cash payments for the quarter to 31 December.Sales receipts
Purchase payments
Overhead paymentsAlthough they sold goods for 860 during the 3 months, the customers had not yet paid for them in full because there was still 85 owing from them at the end of December. Therefore they will only have paid cash of 860 – 85.
Also, at the end of September customers were already owing 45 because of previous sales, and this cash will have been received during the 3 months.
So the actual cash received will have been 860 – 85 + 45.
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