Class Revision 2016.pdf (CFM22A2)

CASH BUDGET

1. Felix Fast Foods (10 Marks)

Felix fast foods need assistance with the management of their cash for the next three months.

At the beginning April they will have an opening balance of R15 000. 75% of their sales are cash. The
few customers that buy on credit will pay their accounts as follows: 50% in the month after sale and
50% in the second month after sales.

All purchases are on credit and 40% of this is payable in the month of purchases and the balance the
month after purchases.

Felix pays his employees on a monthly basis on the 25th of each month. The accountant pays all the
overhead costs on the 7th of the next month.

Vat payable is paid on the 7th of the following month.

The following information is available:

February March April May June

Total Sales R50 000 R60 000 R48 000 R45 000 R60 000

Purchases R19 000 R20 000 R18 000 R19 500 R20 000

Salaries and
R17 500 R16 490 R17 970 R18 800 R17 500
Wages

Overhead
R12 420 R10 600 R14 050 R13 000
expenses

VAT payable R5 250 R4 390




During April Felix sold old equipment (Book value: R1 500) for R1 000. During June he will install a
new countertop for R2 500 payable in June.

REQUIRED

Prepare the cash budget for June.