Accounting and Finance Management Accounting Computer-Based Exemplars Int2/ Higher

Transcription

1 Accounting and Finance Management Accounting Computer-Based Exemplars Int2/ Higher 3842

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3 Autumn 1998 HIGHER STILL Accounting and Finance Management Accounting Computer-Based Exemplars Cash Budgets Int2/Higher Support Materials *+,-./

4 This publication may be reproduced in whole or in part for educational purposes provided that no profit is derived from the reproduction and that, if reproduced in part, the source is acknowledged. First published 1998 Higher Still Development Unit PO Box Ladywell House Ladywell Road Edinburgh EH12 7YH Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

5 INTRODUCTION Teacher/Lecturer Notes The aim of this pack is to provide exemplar spreadsheet questions for student use. The pack, which targets both Intermediate 2 and Higher Levels, will permit students to gain further experience in the use of spreadsheets. The structured questions in the pack are designed to allow students to progress from Intermediate 2 to Higher where appropriate. The first section of the pack contains the student questions split into separate tasks with exemplar spreadsheet templates and formulae worksheets. The final section contains comprehensive solutions for each question including spreadsheet and formulae worksheets. It is suggested that, where software facilities permit, students are encouraged to print embedded formulae in preference to the use of formulae worksheets. This pack will be provided on CD ROM to enable users to customise questions to suit their individual client group requirements. Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

6 Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

7 ACCOUNTING AND FINANCE MANAGEMENT ACCOUNTING INTERMEDIATE 2/HIGHER COMPUTER-BASED EXEMPLARS CASH BUDGETS Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

8 Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

9 Accounting and Finance Contents Management Accounting Cash Budgets QUESTIONS EXERCISE LEVEL PAGE 1 Intermediate Intermediate Intermediate Intermediate 2/Higher Intermediate 2/Higher Intermediate 2/Higher Higher Higher Higher SOLUTIONS EXERCISE LEVEL PAGE 1 Intermediate Intermediate Intermediate Intermediate 2/Higher Intermediate 2/Higher Intermediate 2/Higher Higher Higher Higher Accounting and Finance - Management Accounting - Overhead Apportionment Solutions - Int 2/Higher

10 Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

11 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 1 - TASK 1 John Adams uses a spreadsheet to prepare his Cash Budget for the 3-month period April to June, based upon the following data. Month Sales Purchases Wages Rent Overheads January 30,000 20,000 5,500 3, February 28,000 24,000 5,800 3, March 32,000 25,000 6,000 3, April 40,000 28,000 6,200 3, May 42,000 31,000 6,500 3, June 38,000 25,000 7,000 3, Additional information: (a) The cash balance at 1 April is 10,000. (b) (c) (d) (e) Sales are 50% cash and 50% credit. Payment for credit sales is received by the end of the month after the month of sale. Purchases are all on credit. Credit terms for purchases allow payment within 3 months and John Adams takes full advantage of these terms. John Adams receives a dividend for 2,000 in May. Wages, Rent and Overhead expenses are paid for in the month in which they are incurred. (f) A van is sold in June for 2,000. (g) A loan of 2,000 from a family friend is received in May. INSTRUCTIONS 1 Load spreadsheet CBQ01T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ01T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 1 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 1

12 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 1 - TASK 2 John Adams is pleased with his cash position and decides to expand. A forecast Cash Budget is prepared for the 3 month period July to September to check that the expansion does not create cash difficulties. The following data is estimated. Month Sales Purchases Wages Rent Overheads April 40,000 28,000 6,200 3, May 42,000 31,000 6,500 3, June 38,000 25,000 7,000 3, July 36,000 26,000 7,100 3, August 36,000 28,000 7,300 3, September 34,000 30,000 7,500 3, Additional information: (a) (b) (c) Sales are 50% cash and 50% credit. Payment for credit sales is received by the end of the month after the month of sale. Purchases are all on credit. Credit terms for purchases allow payment within 3 months and John Adams takes full advantage of these terms. Wages, Rent and Overhead expenses are paid for in the month they are incurred. (d) Two new vans are purchased in August for 40,000. (e) (f) A loan of 2,000 from a family friend is repaid in September. Additional premises are rented from July onwards at 2,000 per month. INSTRUCTIONS 1 Load the amended spreadsheet CBQ01T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ01T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 1 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 2

13 Accounting and Finance: Management Accounting Int2: Cash Budgets Q1 TASK A B C D Student Name JOHN ADAMS Cash Budget for the 3-months April May June Opening balance d f f Add: CASH INFLOWS Sales f f f Dividend Van Loan Total Cash Inflows f f f Less: CASH OUTFLOWS Purchases d d d Wages d d d Rent d d d Overheads d d d Total Cash Outflows f f f Closing balance f f f d d d CBQ01T1.XLS 3

14 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 1 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (May) C5... Sales (June) D7... Total Cash Inflows (April) B13... Total Cash Outflows (May) C21... Closing balance (June) D22... Budgets: Cash Budgets 4

15 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 1 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (July) B7... Sales (August) C7... Sales (September) D7... Budgets: Cash Budgets 5

16 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 2 - TASK 1 Laura Burns, who runs a laundry, uses a spreadsheet to prepare her Cash Budget for the 3-month period April to June, based upon the following data. Month Sales Materials Wages Variable Fixed Overheads Overheads January 55,000 27,000 11,000 5,500 11,000 February 66,000 33,000 12,000 6,600 11,000 March 77,000 38,000 13,000 7,700 11,000 April 88,000 44,000 14,000 8,800 11,000 May 110,000 50,000 15,000 10,000 11,000 June 66,000 33,000 16,000 6,600 11,000 Additional information: (a) The cash balance at 1 April is 11,000. (b) (c) (d) (e) (f) (g) Sales are 25% cash and 75% credit. Payment for credit sales is received by the end of the month after the month of sale. Materials purchases are all on credit and are paid for 2 months after they have been received. The first payment of 6,500 on a new dryer is due in June. Wages and Overheads are paid for in the month in which they are incurred. Laura Burns is due to repay a loan of 12,000 in May. Investment income of 500 is received monthly. INSTRUCTIONS 1 Load spreadsheet CBQ02T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ02T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 2 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 6

17 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 2 - TASK 2 Laura Burns discovers a number of errors in the Cash Budget and the following adjustments have to be made. The monthly data should read as follows: Month Sales Materials Wages Variable Fixed Overheads Overheads January 55,000 29,000 11,000 5,500 12,000 February 66,000 31,000 13,000 6,600 12,000 March 77,000 36,000 15,000 7,700 12,000 April 88,000 38,000 17,000 8,800 12,000 May 110,000 40,000 19,000 9,900 12,000 June 66,000 43,000 21,000 10,000 12,000 Additional information: (a) (b) Sales are 30% cash and 70% credit. A dividend of 400 received in May was omitted. (c) The loan repayment in May was 20,000. INSTRUCTIONS 1 Load the amended spreadsheet CBQ02T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ02T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 2 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 7

18 Accounting and Finance: Management Accounting Int 2: Cash Budgets Q2 TASK A B C D Student Name LAURA BURNS Cash Budget for the 3-months April May June Opening balance d f f Add: CASH INFLOWS Sales f f f Investment income d d d Total Cash Inflows f f f Less: CASH OUTFLOWS Materials d d d Wages d d d Variable overheads d d d Fixed overheads d d d Loan d Dryer d Total Cash Outflows f f f Closing balance f f f CBQ02T1.XLS 8

19 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 2 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (June) D5... Sales (April) B7... Total Cash Inflows (May) C13... Total Cash Outflows (June) D21... Closing balance (April) B22... Budgets: Cash Budgets 9

20 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 2 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (April) B7... Sales (May) C7... Sales (June) D7... Budgets: Cash Budgets 10

21 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 3 - TASK 1 JB Campers plc uses a spreadsheet to prepare the Cash Budget for the quarter July to September, based upon the following data. Month Sales Purchases Wages Selling Site Overheads Overheads April 88,500 37,000 8,000 3,250 5,680 May 84,000 40,000 8,400 4,100 5,920 June 93,000 39,060 8,800 3,710 5,440 July 72,000 39,900 6,000 3,210 5,880 August 82,500 35,000 9,600 3,600 6,000 September 98,600 36,400 8,000 3,450 5,680 Additional information: (a) The cash balance at 1 July is 110,000. (b) (c) (d) (e) (f) (g) Sales are 20% cash and 80% credit. Payment for credit sales is received by the end of the month after the month of sale. Purchases are all on credit and are paid for 3 months after they have been received. A plot of land was purchased in March and 38,000 is payable in July. Wages are paid one month in arrear and all overheads are settled in the month in which they are incurred. JB Campers plc is due to repay a loan of 5,000 in August. A dividend of 10,000 is expected in August. INSTRUCTIONS 1 Load spreadsheet CBQ03T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ03T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 3 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 11

22 Accounting and Finance: Management Accounting Int2: Cash Budgets EXERCISE 3 - TASK 2 JB Campers plc is unhappy about the size of the cash balance and the following adjustments have to be made. (a) A new site is to be purchased in July - value 100,000 and new machinery is to be purchased in September - value 60,000. (b) Alter the sales ratios to 30% cash and 70% credit. (c) Wages to change to: April 6,000; May 6,400; June 6,800; July 6,000; August 5,000 and September 5,000. (d) The dividend in August is expected to be 11,000. INSTRUCTIONS 1 Load the amended spreadsheet CBQ03T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ03T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 3 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 12

23 Accounting and Finance: Management Accounting Int2: Cash Budgets Q3 TASK A B C D Student Name JB CAMPERS plc Cash Budget for the 3-months July August September Opening balance d f f Add: CASH INFLOWS Sales f f f Dividend d Total Cash Inflows f f f Less: CASH OUTFLOWS Purchases d d d Land d Wages d d d Selling overheads d d d Site overheads d d d Loan d Total Cash Outflows f f f Closing balance f f f CBQ03T1.XLS 13

24 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 3 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (September) D5... Sales (July) B7... Total Cash Inflows (August) C13... Total Cash Outflows (September) D22... Closing balance (July) B23... Budgets: Cash Budgets 14

25 Accounting and Finance: Management Accounting Int2: Cash Budgets Formulae Worksheet (Question 3 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (July) B7... Sales (August) C7... Sales (September) D7... Land (July) B16... Budgets: Cash Budgets 15

26 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 4 - TASK 1 Ferguson Co Ltd uses a spreadsheet to prepare its Cash Budget for the quarter April to June, based upon the following data. Month Sales Materials Wages Distribution General Expenses Expenses January 60,000 15,200 15,000 4,100 5,000 February 60,000 16,000 16,000 4,100 5,100 March 61,000 16,400 16,000 4,200 5,200 April 61,000 16,400 16,000 4,300 5,200 May 62,000 17,100 18,000 4,400 5,300 June 62,000 17,200 18,000 4,400 5,300 Additional information: (a) The cash balance at 1 April is 30,000. (b) (c) (d) (e) (f) (g) Sales are 50% cash and 50% credit. Payment for credit sales is received by the end of the month after the month of sale. Cash sales customers are allowed a 10% discount. Materials are all on credit and are paid for 3 months after they have been received. General expenses include 100 per month depreciation. Wages, distribution expenses and general expenses are settled in the month in which they are incurred. Ferguson Co Ltd pay 3,000 for equipment in May and also negotiate a bank loan of 10,000 in June. INSTRUCTIONS 1 Load spreadsheet CBQ04T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ04T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 4 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 16

27 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 4 - TASK 2 Ferguson Co Ltd is unhappy about the size of the cash balance and the following adjustments have to be made during the quarter July to September. Month Sales Materials Wages Distribution General Expenses Expenses July 67,000 17,400 18,000 4,500 5,400 August 65,000 17,600 18,000 4,500 5,400 September 67,000 17,800 20,000 4,600 5,500 Additional information: (a) New equipment is to be purchased in July - value 70,000. (b) Cash discount is to be increased to 20%. (c) (d) An advertising campaign will run from September to December at 1,000 per month. Depreciation is to be increased to 500 per month from July onwards. INSTRUCTIONS 1 Load the amended spreadsheet CBQ04T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ04T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 4 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 17

28 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Q4 TASK A B C D Student Name FERGUSON CO LTD Cash Budget for the 3-months April May June Opening balance d f f Add: CASH INFLOWS Sales f f f Bank loan d Total Cash Inflows f f f Less: CASH OUTFLOWS Materials d d d Wages d d d Distribution expenses d d d General expenses f f f Equipment d Total Cash Outflows f f f Closing balance f f f CBQ04T1.XLS 18

29 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 4 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (June) D5... Sales (April) B7... Total Cash Inflows (May) C13... General expenses (June) D18... Total Cash Outflows (April) B21... Closing balance (May) C23... Budgets: Cash Budgets 19

30 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 4 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (July) B7... Sales (August) C7... Sales (September) D7... General expenses (September) D18... Budgets: Cash Budgets 20

31 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 5 - TASK 1 Greigson Brothers uses a spreadsheet to prepare its Cash Budget for the quarter September to November, based upon the following data. Production Budget in units: Jun Jul Aug Sep Oct Nov Opening Balance Add: Production 2,500 2,800 3,000 3,400 3,800 4,100 2,750 3,550 3,550 3,950 4,240 4,340 Less: Sales 2,000 3,000 3,000 3,500 4,000 4,000 Closing Balance Additional information: (a) The cash balance at 1 September is 3,000. (b) (c) (d) (e) (f) Sales ( 50 per unit) are 80% cash and 20% credit. Payment for credit sales is received by the end of the month after the month of sale. Cash sales customers are allowed a 10% discount. Materials ( 20 per unit) are all on credit and are paid for 3 months after they have been used in production. Labour ( 10 per unit) and variable costs ( 3 per unit) are paid for in the month in which they are incurred. Fixed costs are 2,600 per month and include 1,000 per month depreciation. (g) A van is purchased in September costing 18,000. (h) A short-term loan of 5,000 is repaid in full in November. INSTRUCTIONS 1 Load spreadsheet CBQ05T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ05T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 5 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 21

32 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 5 - TASK 2 Greigson Brothers is pleased with the Cash Budget results and uses a spreadsheet to prepare its Cash Budget for the quarter December to February, based upon the following data. Production Budget in units: Sep Oct Nov Dec Jan Feb Opening Balance Add: Production 3,400 3,800 4,100 3,900 3,500 3,000 3,950 4,240 4,340 4,240 3, Less: Sales 3,500 4,000 4,000 4,200 3,500 2,800 Closing Balance Additional information: (a) (b) (c) (d) (e) Sales ( 50 per unit) are 70% cash and 30% credit. Payment for credit sales is received by the end of the month after the month of sale. Cash sales customers are allowed a 20% discount. Materials ( 25 per unit) are all on credit and are paid for 3 months after they have been used in production. Labour ( 15 per unit) and variable costs ( 4 per unit) are paid for in the month in which they are incurred. Fixed costs are 3,500 per month and include 2,000 per month depreciation. (f) A van is purchased in January costing 20,000. (g) New premises are purchased - value 190,000 is paid in full in December. INSTRUCTIONS 1 Load spreadsheet CBQ05T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ05T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 5 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 22

33 Accounting and Finance: Management Accounting Int 2/Higher: Cash Budgets Q5 TASK A B C D Student Name GREIGSON BROTHERS Cash Budget for the 3-months September October November Opening balance d f f Add: CASH INFLOWS Sales f f f Total Cash Inflows f f f Less: CASH OUTFLOWS Raw materials f f f Labour f f f Variable overheads f f f Fixed overheads f f f Van Loan Total Cash Outflows f f f Closing balance f f f d d CBQ05T1.XLS 23

34 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 5 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (November) D5... Sales (September) B7... Total Cash Inflows (October) C13... Raw materials (November) D16... Labour (September) B17... Variable overheads (October) C18... Fixed overheads (November) D19... Total Cash Outflows (September) B23... Closing balance (October) C24... Budgets: Cash Budgets 24

35 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 5 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (December) B7... Sales (January) C7... Sales (February) D7... Direct materials (December) B16... Labour (January) C17... Variable overheads (February) D18... Fixed overheads (December) B19... Budgets: Cash Budgets 25

36 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 6 - TASK 1 Harrison plc uses a spreadsheet to prepare its Cash Budget for the quarter July to September, based upon the following data. Apr May Jun Jul Aug Sep Production (units) 1,200 1,350 1,550 1,450 1,650 1,500 Credit sales (units) 2,600 3,000 4,000 4,300 4,400 3,800 Cash sales (units) Additional information: (a) The cash balance at 1 September is 3,000. (b) (c) (d) (e) (f) Units are sold at 20 each. Payment for credit sales is received by the end of the month after the month of sale and cash sales customers are allowed a 10% discount. Materials ( 3 per unit) are all on credit and are paid for 3 months after they have been used in production. Labour ( 8 per unit) and production expenses ( 4 per unit) are paid for in the month in which they are incurred. Fixed costs are 3,500 per month and include 1,500 per month depreciation. (g) A new machine is purchased in August costing 50,000. (h) (i) (j) A bank loan of 12,000 is raised in July. Investment income of 800 is received monthly. Electricity charges of 400 are paid quarterly, the first quarter beginning on 1 January. INSTRUCTIONS 1 Load spreadsheet CBQ06T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ06T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 6 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 26

37 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets EXERCISE 6 - TASK 2 Harrison plc decide to prepare a forecast for the period October to December to see if it is possible to expand to new premises. In order to guarantee sufficient cash to achieve this, the following data applies. Jul Aug Sep Oct Nov Dec Production (units) 1,450 1,650 1,500 1,400 1,400 1,500 Credit sales (units) 4,300 4,400 3,800 3,000 3,200 3,400 Cash sales (units) Additional information: (a) (b) (c) (d) (e) (f) Units are sold at 20 each until September and at 25 each from October onwards. Payment for credit sales is received by the end of the month after the month of sale and cash sales customers are allowed a 10% discount rising to 20% from October onwards. Materials ( 3 per unit) are all on credit and are paid for 3 months after they have been used in production. Labour ( 8 per unit rising to 10 per unit from October onwards) are paid for in the month in which they are incurred. Production expenses ( 4 per unit) are paid for in the month in which they are incurred. Fixed costs are 3,500 per month and include 1,500 per month depreciation. From October onwards fixed costs rise to 5,000 per month and include 2,000 per month depreciation (g) New premises are purchased in October costing 250,000. (h) (i) Investment income of 800 is received monthly. Electricity charges of 400 are paid quarterly, the first quarter beginning on 1 January. INSTRUCTIONS 1 Load spreadsheet CBQ06T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ06T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 6 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 27

38 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Q6 TASK A B C D Student Name HARRISON plc Cash Budget for the 3-months July August September Opening balance d f f Add: CASH INFLOWS Sales f f f Bank loan d Investment income d d d Total Cash Inflows f f f Less: CASH OUTFLOWS Raw materials f f f Labour f f f Production expenses f f f Fixed costs f f f Machine Electricity Total Cash Outflows f f f Closing balance f f f d d CBQ06T1.XLS 28

39 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 6 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (September) D5... Sales (July) B7... Total Cash Inflows (August) C14... Raw materials (September) D16... Labour (July) B17... Production expenses (August) C18... Fixed costs (September) D19... Total Cash Outflows (July) B23... Closing balance (August) C24... Budgets: Cash Budgets 29

40 Accounting and Finance: Management Accounting Int2/Higher: Cash Budgets Formulae Worksheet (Question 6 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (October) B7... Sales (November) C7... Sales (December) D7... Raw materials (October) B16... Labour (November) C17... Production expenses (December) D18... Fixed costs (October) B19... Budgets: Cash Budgets 30

41 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 7 - TASK 1 Klienguard plc uses a spreadsheet to prepare its Production Budget and its Cash Budget for the quarter October to December, based upon the following data. Jul Aug Sep Oct Nov Dec Jan Production (units) Sales (units) Additional information: (a) The opening stock on 1 July is 50 units. (b) The cash balance at 1 October is 900. (c) (d) (e) (f) (g) (h) (i) Units are sold at 10 each. Sales are 50% cash and 50% credit. Payment for credit sales is received 2 months after the month of sale. Cash sales customers are allowed a 10% discount. Raw materials costing 4 per unit are all purchased on credit. One quarter of the cost is paid upon purchase with the balance being paid 2 months later. Labour ( 1 per unit) and variable overheads ( 2 per unit) are paid for in the month in which they are incurred. Fixed overheads are 100 per month and include 30 per month depreciation. A bank loan of 2,000 is raised in October. (j) A second-hand delivery van is purchased for 10,200. (k) Insurance of 200 is paid quarterly, the first quarter beginning on 1 January. INSTRUCTIONS 1 Load spreadsheet CBQ07T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ07T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 7 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 31

42 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 7 - TASK 2 Klienguard plc decides to make changes to its budgets with the intention of reducing the cash deficit. The Production Budget and the Cash Budget for the quarter January to March have to be prepared, based upon the following data. Oct Nov Dec Jan Feb Mar Production (units) Sales (units) Additional information: (a) (b) (c) (d) (e) (f) (g) (h) Units are sold at 10 each, rising to 12 each from January. Sales are 50% cash and 50% credit. Payment for credit sales is received 2 months after the month of sale. Cash sales customers are allowed a 10% discount, rising to 20% from January. Raw materials costing 4 per unit, rising to 6 per unit from January, are all purchased on credit. One quarter of the cost is paid upon purchase with the balance being paid 2 months later. Labour ( 1 per unit) and variable overheads ( 2 per unit, rising to 3 per unit from January) are paid for in the month in which they are incurred. Fixed overheads are 100 per month and include 30 per month depreciation. From January the fixed costs will be 150 per month including 30 per month depreciation. A dividend of 3,000 is received in February. Insurance of 200 is paid quarterly, the first quarter beginning on 1 January. INSTRUCTIONS 1 Load spreadsheet CBQ07T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ07T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 7 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 32

43 Accounting and Finance: Management Accounting Higher: Cash Budgets Q7 TASK A B C D Student Name KLIENGUARD plc Production Budget for the 3-months October November December Units Units Units Opening stock f f f Add: Production d d d f f f Less: Sales d d d Closing stock f f f KLIENGUARD plc Cash Budget for the 3-months October November December Opening balance d f f Add: CASH INFLOWS Sales f f f Bank loan d Total Cash Inflows f f f Less: CASH OUTFLOWS Raw materials f f f Direct labour d d d Variable overheads f f f Fixed overheads f f f Insurance Delivery van Total Cash Outflows f f f Closing balance f f f d d CBQ07T1.XLS 33

44 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 7 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening stock (October) B5... Opening stock (November) C5... Closing stock (December) D9... Sales (October) B16... Total Cash Inflows (November) C23... Raw materials (December) D25... Variable overheads (October) B27... Fixed overheads (November) C28... Total Cash Outflows (December) D32... Closing balance (October) B33... Budgets: Cash Budgets 34

45 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 7 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (January) B16... Sales (February) C16... Sales (March) D16... Raw materials (January) B25... Raw materials (February) C25... Raw materials (March) D25... Budgets: Cash Budgets 35

46 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 8 - TASK 1 Linpro plc uses a spreadsheet to prepare its Production Budget and its Cash Budget for the quarter October to December, based upon the following data. Jun Jul Aug Sep Oct Nov Dec Production (units) 2,000 3,000 2,500 4,000 1,550 3,500 Closing stock (units) Additional information: (a) The cash balance at 1 October is 20,000. (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Units are sold at 30 each. Sales are 20% cash and 80% credit. Payment for credit sales is received 2 months after the month of sale. Cash sales customers are allowed a 10% discount. Raw materials costing 5 per unit are all purchased on credit and are paid for in the month after their use in production. Labour ( 15 per unit) and variable overheads ( 2 per unit) are paid for in the month in which they are incurred. A labour bonus of 1 per unit is paid when production rises above 2,500 units. Fixed overheads are 2,400 per month and include 600 per month depreciation. A bank loan of 50,000 is raised in January, being repaid at 3,000 per half-year beginning in June. New equipment is bought costing 30,000 and is paid for in 3 equal monthly instalments starting in October. Advertising of 5,000 per quarter is paid, the first quarter beginning on 1 March. Investment income of 2,000 is received every month. INSTRUCTIONS 1 Load spreadsheet CBQ08T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ08T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 8 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 36

47 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 8 - TASK 2 Linpro plc decides to make changes to its budgets. The Production Budget and the Cash Budget for the quarter January to March have to be prepared, based upon the following data. Oct Nov Dec Jan Feb Mar Production (units) 4,000 1,550 3,500 2,800 3,000 2,900 Closing stock (units) Additional information: (a) (b) (c) (d) (e) (f) Units are sold at 30 each. Sales are 80% on credit, rising to 90% from January. Payment for credit sales is received 2 months after the month of sale. Cash sales customers are allowed a 10% discount, rising to 20% from January. Raw materials costing 5 per unit, rising to 6 per unit from January, are all purchased on credit and are paid for in the month after their use in production. Labour ( 15 per unit) and variable overheads ( 2 per unit) are paid for in the month in which they are incurred. A labour bonus of 1 per unit is paid when production rises above 2,500 units. From January the bonus is 2 per unit on production over 2,000 units. (g) Fixed overheads are 2,400 per month and include 600 per month depreciation. The monthly cost will increase by 1,000 from January with depreciation unchanged. (h) (i) (k) (l) The bank loan raised in January, continues to be repaid at 3,000 per half-year beginning in June. New equipment is bought in January costing 100,000 and is paid for immediately. Advertising of 5,000 per quarter is paid, the first quarter beginning on 1 March. Investment income of 2,000 is received every month. INSTRUCTIONS 1 Load spreadsheet CBQ08T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ08T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 8 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 37

48 Accounting and Finance: Management Accounting Higher: Cash Budgets Q8 TASK A B C D Student Name LINPRO plc Production Budget for the 3-months October November December Units Units Units Opening stock d f f Add: Production d d d f f f Less: Sales f f f Closing stock d d d LINPRO plc Cash Budget for the 3-months October November December Opening balance d f f Add: CASH INFLOWS Sales f f f Investment income d d d Total Cash Inflows f f f Less: CASH OUTFLOWS Raw materials f f f Direct labour f f f Variable overheads f f f Fixed overheads f f f Equipment f f f Advertising d Bank loan d Total Cash Outflows f f f Closing balance f f f CBQ08T1.XLS 38

49 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 8 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening stock (November) C5... Less: Sales (December) D8... Opening balance (November) C14... Sales (October) B16... Sales (November) C16... Sales (December) D16... Total Cash Inflows (October) B23... Raw materials (November) C25... Direct labour (December) D26... Variable overheads (October) B27... Fixed overheads (November) C28... Equipment (December) D29... Total Cash Outflows (October) B32... Closing balance C33... Budgets: Cash Budgets 39

50 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 8 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (January) B16... Sales (February) C16... Sales (March) D16... Raw materials (January) B25... Raw materials (February) C25... Direct labour (January) B26... Direct labour (February) C26... Direct labour (March) D26... Fixed overheads (January) B28... Budgets: Cash Budgets 40

51 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 9 - TASK 1 McLintock Ironware uses a spreadsheet to prepare its Production Budget and its Cash Budget for the quarter July to September, based upon the following data. Apr May Jun Jul Aug Sep Production (units) Sales (units) Additional information: (a) The cash balance at 1 July is 1,500. (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) The opening stock in April is 20 units. Units are sold at 20 each. Sales are 50% cash and 50% credit. Payment for credit sales is received 2 months after the month of sale. Cash sales customers are allowed a 10% discount. Raw materials costing 6 per unit are all purchased on credit and are paid for 2 months after their use in production. Labour costing 5 per unit is paid for in the month in which it is incurred. Two-thirds of the variable expenses of 3 per unit are paid for in the month of production and the remainder one month later. Fixed overheads are 150 per month and include 50 per month depreciation. A loan of 3,000 is raised in July and repaid in the same month. A new machine costing 26,000 is bought and paid for in September. Heat and light at 2,000 per quarter is paid, the first quarter beginning on 1 April. Investment income of 3,000 is received in July and January. INSTRUCTIONS 1 Load spreadsheet CBQ09T1 into your computer and enter your name in cell D1. 2 Using the data and additional information above, complete the spreadsheet by entering the appropriate (a) data into all cells marked with a d; (b) formulae into all cells marked with an f. 3 Save your amended spreadsheet as CBQ09T1S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 9 - Task 1) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 41

52 Accounting and Finance: Management Accounting Higher: Cash Budgets EXERCISE 9 - TASK 2 McLintock Ironware decides to make changes to its budgets. The Production Budget and the Cash Budget for the quarter October to December have to be prepared, based upon the following data. Jul Aug Sep Oct Nov Dec Production (units) Sales (units) Additional information: (a) (b) (c) (d) (e) (f) Units are sold at 20 each. Sales are 50% cash and 50% credit. Payment for credit sales is received 2 months after the month of sale.. Cash sales customers are allowed a 10% discount, rising to 20% from October. Raw materials costing 6 per unit, rising to 8 per unit from October are all purchased on credit and are paid for 2 months after their use in production Labour costing 5 per unit, rising by 40% from October, is paid for in the month in which it is incurred. Two-thirds of the variable expenses of 3 per unit are paid for in the month of production and the remainder one month later. (g) Fixed overheads are 150 per month and include 50 per month depreciation. The depreciation charged is reduced by 10 from November onwards. (h) Bank charges for October amount to 5,000. (i) (j) Heat and light at 2,000 per quarter is paid, the first quarter beginning on 1 April. Investment income of 3,000 is received in July and January. INSTRUCTIONS 1 Load spreadsheet CBQ09T1S into your computer. 2 Using the data and additional information above, complete the spreadsheet by entering or deleting the appropriate formulae and data. 3 Save your amended spreadsheet as CBQ09T2S. 4 Print your completed spreadsheet. 5 Complete the Formulae Worksheet (Question 9 - Task 2) by writing down the appropriate formulae from your spreadsheet. Budgets: Cash Budgets 42

53 Accounting and Finance: Management Accounting Higher: Cash Budgets Q9 TASK A B C D Student Name McLINTOCK IRONWARE Production Budget for the 3-months July August September Units Units Units Opening stock f f f Add: Production d d d f f f Less: Sales f d d Closing stock f f f McLINTOCK IRONWARE Cash Budget for the 3-months July August September Opening balance d f f Add: CASH INFLOWS Sales f f f Loan d Investment income d Total Cash Inflows f f f Less: CASH OUTFLOWS Raw materials f f f Direct labour f f f Variable overheads f f f Fixed overheads f f f Machine d Heat and light d Loan d Total Cash Outflows f f f Closing balance f f f CBQ09T1.XLS 43

54 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 9 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening stock (July) B5... Opening stock (August) C5... Closing stock (September) D9... Opening balance (August) C14... Sales (July) B16... Sales (August) C16... Sales (September) D16... Total Cash Inflows (July) B24... Raw materials (August) C26... Direct labour (September) D27... Variable overheads (July) B28... Variable overheads (August) C28... Variable overheads (September) D28... Fixed overheads (July) B29... Total Cash Inflows (August) C34... Closing balance (September) D35... Budgets: Cash Budgets 44

55 Accounting and Finance: Management Accounting Higher: Cash Budgets Formulae Worksheet (Question 9 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (October) B16... Sales (November) C16... Sales (December) D16... Raw materials (October) B26... Raw materials (November) C26... Raw materials (December) D26... Direct labour (October) B27... Variable overheads (November) C28... Fixed overheads (December) D29... Budgets: Cash Budgets 45

56 Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

57 ACCOUNTING AND FINANCE MANAGEMENT ACCOUNTING INTERMEDIATE 2/HIGHER COMPUTER-BASED EXEMPLARS CASH BUDGETS EXEMPLAR SOLUTIONS Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

58 Accounting and Finance: Management Accounting - Cash Budgets - Int 2/Higher

59 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q1 TASK 1 FORMULAE A B C D Student Name JOHN ADAMS Cash Budget for the 3-months April May June Opening balance =B22 =C22 Add: CASH INFLOWS Sales =( )*50% =( )*50% =( )*50% Dividend 2000 Van 2000 Loan 2000 Total Cash Inflows =SUM(B7:B12) =SUM(C7:C12) =SUM(D7:D12) Less: CASH OUTFLOWS Purchases Wages Rent Overheads Total Cash Outflows =SUM(B15:B20) =SUM(C15:C20) =SUM(D15:D20) Closing balance =B5+B13-B21 =C5+C13-C21 =D5+D13-D21 CBQ01T1F.XLS 49

60 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q1 TASK 1 SOLUTION A B C D Student Name JOHN ADAMS Cash Budget for the 3-months April May June Opening balance 10,000 16,000 26,600 Add: CASH INFLOWS Sales 36,000 41,000 40,000 Dividend 2,000 Van 2,000 Loan 2,000 Total Cash Inflows 36,000 45,000 42,000 Less: CASH OUTFLOWS Purchases 20,000 24,000 25,000 Wages 6,200 6,500 7,000 Rent 3,500 3,500 3,500 Overheads Total Cash Outflows 30,000 34,400 35,900 Closing balance 16,000 26,600 32,700 CBQ01T1S.XLS 50

61 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Formulae Worksheet (Question 1 - Task 1) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Opening balance (May) C5 =B22 Sales (June) D7 =( )*50% Total Cash Inflows (April) B13 =SUM(B7:B12) Total Cash Outflows (May) C21 =SUM(C15:C20) Closing balance (June) D22 =D5+D13-D21 Budgets: Cash Budgets 51

62 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q1 TASK 2 CHANGES A B C D Student Name JOHN ADAMS Cash Budget for the 3-months July August September Opening balance Add: CASH INFLOWS Sales =( )*50% =( )*50% =( )*50% Dividend 2000* Van 2000* Loan 2000* Total Cash Inflows Less: CASH OUTFLOWS Purchases Wages Rent Overheads Vans Loan 2000 Total Cash Outflows Closing balance * Delete this figure CBQ01T2C.XLS 52

63 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q1 TASK 2 SOLUTION A B C D Student Name JOHN ADAMS Cash Budget for the 3-months July August September Opening balance 32,700 30,600-15,700 Add: CASH INFLOWS Sales 37,000 36,000 35,000 Dividend Van Loan Total Cash Inflows 37,000 36,000 35,000 Less: CASH OUTFLOWS Purchases 28,000 31,000 25,000 Wages 7,100 7,300 7,500 Rent 3,500 3,500 3,500 Overheads Vans 40,000 Loan 2,000 Total Cash Outflows 39,100 82,300 38,600 Closing balance 30,600-15,700-19,300 CBQ01T2S.XLS 53

64 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Formulae Worksheet (Question 1 - Task 2) Complete this worksheet with the appropriate formula for each spreadsheet cell as indicated. Item Cell Formula Sales (July) B7 =( )*50% Sales (August) C7 =( )*50% Sales (September) D7 =( )*50% Budgets: Cash Budgets 54

65 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q2 TASK 1 FORMULAE A B C D Student Name LAURA BURNS Cash Budget for the 3-months April May June Opening balance =B22 =C22 Add: CASH INFLOWS Sales =88000*25%+77000*75% =110000*25%+88000*75% =66000*25% *75% Investment income Total Cash Inflows =SUM(B7:B12) =SUM(C7:C12) =SUM(D7:D12) Less: CASH OUTFLOWS Materials Wages Variable overheads Fixed overheads Loan Dryer 6500 Total Cash Outflows =SUM(B15:B20) =SUM(C15:C20) =SUM(D15:D20) Closing balance =B5+B13-B21 =C5+C13-C21 =D5+D13-D21 CBQ02T1F.XLS 55

66 Accounting and Finance: Management Accounting: Cash Budgets: Exemplar Solutions Int 2 Q2 TASK 1 SOLUTION A B C D Student Name LAURA BURNS Cash Budget for the 3-months April May June Opening balance 11,000 24,450 32,450 Add: CASH INFLOWS Sales 79,750 93,500 99,000 Investment income Total Cash Inflows 80,250 94,000 99,500 Less: CASH OUTFLOWS Materials 33,000 38,000 44,000 Wages 14,000 15,000 16,000 Variable overheads 8,800 10,000 6,600 Fixed overheads 11,000 11,000 11,000 Loan 12,000 Dryer 6,500 Total Cash Outflows 66,800 86,000 84,100 Closing balance 24,450 32,450 47,850 CBQ02T1S.XLS 56