Scroll down Cash Budget Model

Cash Budget Model - Case Study BRIGHTER BATTERIES PTY LTD. Scroll down
Scroll down BRIGHTER BATTERIES PTY LTD.
SALES COLLECTIONS: CASH BUDGET 20AD/AE
b) The following actual and budgeted financial data is for the
business of: BRIGHTER BATTERIES PTY LTD. For the years 20AD/AE MONTH OF SALE: 0.5
FIRST MONTH AFTER: 0.3 JAN FEB MAR
SECOND MONTH AFTER: 0.15
INFLOWS:
NOV DEC JAN FEB MAR NOV DEC JAN FEB MAR
Cash Sales 26,000 26,000 34,000
$ $ $ $ $ Account sales 160,000 180,000 150,000 158,000 190,000 Account sales collections 153,000 151,000 164,900

Cash Sales 20,000 24,000 26,000 26,000 34,000 Collections:

Account Sales 160,000 180,000 150,000 158,000 190,000 Month of sale: 75,000 79,000 95,000
Account Purchases 50,000 50,000 50,000 60,000 40,000 First after: 54,000 45,000 47,400 TOTAL MONTHLY INFLOW: 179,000 177,000 198,900
Wages 50,000 38,000 34,000 60,000 60,000 Second after: 24,000 27,000 22,500
Overhead Expenses 18,000 16,000 14,000 24,000 24,000 OUTFLOWS
Account sales collections 153,000 151,000 164,900
Payments to Accs Payable: 48,500 48,500 58,200
CASH SALES: Overhead payments 9,000 19,000 19,000
1) Sales collections from debtors are typically as follows: Cash Sales 26,000 26,000 34,000 Wages cash outlay: 34,000 60,000 60,000
Back to Index Tax Payable 70,000
In the month of sale: 50.00% Scroll down Loan Repayments 60,000
In the first month after month of sale: 30.00% Payments to Accounts Payable New Machine 160,000
In the second month after month of sale: 15.00%
Paid in month after sale.
Discount taken: 3.00% TOTAL MONTHLY OUTFLOW: 91,500 357,500 197,200

2) Materials purchased are paid for in the month after Acc Purchases 50,000 50,000 50,000 60,000 40,000 Back to Index
purchase. A discount is taken at: 3.00%
Payments to Accs Payable: 48,500 48,500 58,200

3) Direct labour costs are paid for during the month in

which they are incurred. OVERHEAD EXPENSES:
Overheads: 18,000 16,000 14,000 24,000 24,000
4) Monthly overhead expenses include depreciation: $5,000
The cash flow from these expenses occurs during the Depreciation content: 5,000 per month
month in which they are incurred.
Overhead payments 9,000 19,000 19,000

5) A tax assessment is payable in February: $70,000

WAGES:
6) A new machine is needed in February: $160,000
Wages cash outlay: 34,000 60,000 60,000
7) The last of five annual loan repayments is due
in March: $60,000

8) The company has a policy of maintaining a bank

balance of $80 000 at the end of each month: $80,000 OTHER ISSUES: Scroll down
Excess funds are lent at call. Financing Plan
These invested funds are added to Tax Payable $70,000
or withdrawn as necessary on the last day of the Loan Repayments $60,000 To finance the shortfall in February and March:
month. At the end of December this requirement was New Machine $160,000
satisified. Tax Committment: Short term funds.
Maintained Account balance: $80,000
Funds invested at call on December 31: $10,000 Back to index Refinancing: Consider a roll over on permanent financing

New equipment: Finance long term to match useful life.

Instructions:

The financial manager has used the information to prepare a

budget for cash receipts and payments for January to March.
The budget shows all movements in the investment of
excess funds or recommended financing of deficiencies. Cash Balances
JAN FEB MAR

Discuss how this business might finance any Monthly Surplus (Deficit) 87,500 -180,500 1,700
short term deficiencies of funds which you have Opening Bank Balance 80,000 80,000 80,000
identified.
Funds available 167,500 -100,500 81,700
Back to index Loans redeemed/(placed) ($87,500) $180,500 ($1,700)

Bank Balance $ 80,000 $ 80,000 $ 80,000

Investment/borrowing balances
Funds Invested/(Borrowed)
Opening Balance $10,000 97,500 -83,000
Trans from/(to) Cheque Acc 87,500 -180,500 1,700

Closing balance $ 97,500 $ (83,000) $ (81,300)

Back to index

366972035.xls Page 1