• January 5th, 2017

Accounting do finance calculations

Paper , Order, or Assignment Requirements

Question 1: Cash budget
This question is not related to Question 2.
In this question you are required to complete a 12-month cash budget for Shaun Garrett,
trading as Garrett Chainsaws. The business activity conducted by Shaun is selling and
servicing chainsaws.
The following GST-inclusive information has been provided to enable you to prepare a
monthly cash budget for the year ended 31 March 2017.
½ Income is budgeted at $24,150 per month for February 2016 to March 2017, except for
August and September ($27,600 per month), and November and December ($31,050
per month). Seventy per cent of income is received in the month the income is
budgeted and 30% is received in the following month.
½ Purchases are 30% of each month’s budgeted (GST-exclusive) income (not budgeted
cash received), and are paid for in the following month.
½ ACC levies are $3,013 per annum, with $1,978 payable in June and $1,035 in
December.
½ Accounting fees are budgeted at $2,346 per annum, with 50% payable in May and
50% in November.
½ Advertising is 4% of the month’s budgeted income (not budgeted cash received),
payable in the following month.
½ Bank fees are $50 per month.
½ Computer expenses are $115 per month.
½ Credit card charges are 2% of the month’s GST-inclusive budgeted cash received, and
are payable in the following month.
½ Entertainment is $138 per month, except for December, when it is budgeted at $552.
½ Insurance is $253 per month.
½ Motor vehicle expenses are $161 per month.
½ Other expenses (all of which include GST) are $322 per month.
½ Printing and stationery is $92 every second month (May, July, and so on).
½ Rent is $1,380 per month until September. It increases to $1,518 per month from
October.
½ Repairs and maintenance are $184 per month.
½ Telephone and internet are $299 per month.
½ Wages are budgeted at $5,800 per month from April to December 2016 and at $6,090
from January 2017.
½ In June 2016 new equipment is going to be purchased and paid for at a cost of $4,140.
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½ In January 2017 a new vehicle is going to be purchased. The budgeted cost is $29,900.
It is to be paid for with a $13,800 trade-in for the old van and a $16,100 short-term
interest-free loan. Loan repayments of $1,610 per month start in February 2017.
½ Drawings are $5,000 per month.
½ GST payable in May 2016 for February and March 2016 transactions is $2,775. Shaun
is registered for GST on a payments basis, and he pays GST bimonthly (May, June,
August, October, January and February).
½ The opening bank balance at 1 April 2016 is $42,607 in funds.
Prepare Garrett Chainsaws’ monthly cash budget for the year ended 31 March 2017.
You should format your answer in the same way as in the text examples. For example,
amounts should be rounded to the nearest dollar.

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