- This topic has 3 replies, 3 voices, and was last updated 4 years ago by
.
- Posts
A cash forecast is forecasting what the future cash balance will be. A cash budget is needed to be able to do this.
Have you watched my free lectures on budgeting?
Sir i ahve a question i dont understand,
A company budgets to purchase $500000 in material in April, $800000in May and $700000 in June. 10% of purchases are paid for in the month of purchase, in order to benefit from a discount of 2% for immediate payment. One half of the remaining purchases are paid for in the following month and the rest are paid after two months. What are the budgetted payments to material suppliers in June?I dont understand do i take the 10% of purchase to be paid from april or june? And how is the 2% accounted for
They purchase 500,000 in April.
10% (so 50,000) are paid for in April and the payment is 50,000 less 2%, so 49,000 is the payment in April.
That leaves 450,000 of which half (225,000) is paid in May and the other half (225,5000) is paid in June.The same logic applies to each of the purchases.
- You must be logged in to reply to this topic.