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- 12 Marks
MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements
Calculates cash receipts expected over three months, considering credit sales terms and bad debts.
Question
The following information was extracted from the books of LAHA Limited:
| Product P (units) | Product Q (units) |
|---|---|
| November | 1,500 |
| December | 2,000 |
| January | 1,000 |
| February | 2,000 |
| March | 3,000 |
Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.
Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)
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- Tags: Accounts Receivable, Bad Debts, Cash Flow, Cash Receipts, Credit Sales, Sales Revenue
- Level: Level 1
- Topic: Accounting for Cost Elements
- Series: NOV 2015
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- 20 Marks
MI – Mar-Jul 2020 – L1 – SB – Q4 – Business Process Technologies
Prepare a monthly cash budget for Wareroom Trading Limited for the first three months of 2020 using a columnar format.
Question
The following information relates to Wareroom Trading Limited:
| Month | NOV 2019 | DEC 2019 | JAN 2020 | FEB 2020 | MAR 2020 |
|---|---|---|---|---|---|
| Sales (N) | 850,000 | 950,000 | 720,000 | 750,000 | 780,000 |
| Purchases (N) | 360,000 | 360,000 | 300,000 | 400,000 | 350,000 |
Additional information:
- All sales are on credit, collectible 50% in 30 days, 25% in 60 days, 20% in 90 days, and balance regarded as bad debts.
- All purchases are also on credit, payable 40% in 30 days and 30% each in 60 and 90 days respectively.
- A new generator costing N455,000 will be acquired in February under a 30-day credit agreement.
- An old car will be sold for N50,000 cash in February.
- Monthly salaries are N80,000 payable as and when due.
- Commission on sales is 5% payable to sales agents 2 months in arrears.
- Company income tax of N235,000 is due and payable in January.
- An investment is expected to bring in N60,000 gross in February, subject to 10% withholding tax.
- The staff Christmas party in December is expected to cost the company a total of N90,000, though 60% of the expenses will be pushed for settlement the month following.
- Assume an overdraft of N283,000 on 31 December 2019.
Required:
Prepare a monthly cash budget for Wareroom Trading Limited for the first three months of 2020 using a columnar format. (Total 20 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Budgeting, Cash Budget, Credit Purchases, Credit Sales, Financial planning
- Level: Level 1
- Topic: Business Process Technologies
- Series: MAR/JULY 2020
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- 1 Marks
FA – Mar/July 2020 – L1 – SA – Q20 -Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)
Determining the sales account balance based on cash and credit sales
Question
Iyabo started business on September 01, 2019. She made cash sales of N64,000 and issued invoices of N102,000 for credit sales of which N86,000 had been paid. What would be the balance in the sales account in the general ledger at the end of September?
A. N166,000
B. N102,000
C. N86,000
D. N80,000
E. N64,000
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- 12 Marks
MI – Nov 2015 – L1 – SB – Q6b – Accounting for Cost Elements
Calculates cash receipts expected over three months, considering credit sales terms and bad debts.
Question
The following information was extracted from the books of LAHA Limited:
| Product P (units) | Product Q (units) |
|---|---|
| November | 1,500 |
| December | 2,000 |
| January | 1,000 |
| February | 2,000 |
| March | 3,000 |
Product P is sold for ₦200 per unit, and Product Q for ₦300 per unit. All sales are on credit. 20% of total sales are received in the month of sale, 40% in the following month, and the remaining balance (excluding bad debts) is received at the end of the second month. Bad debts are 2% of total sales and are written off at the end of the second month following sale.
Required:
Calculate the cash receipts expected in January, February, and March. (12 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Accounts Receivable, Bad Debts, Cash Flow, Cash Receipts, Credit Sales, Sales Revenue
- Level: Level 1
- Topic: Accounting for Cost Elements
- Series: NOV 2015
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- 20 Marks
MI – Mar-Jul 2020 – L1 – SB – Q4 – Business Process Technologies
Prepare a monthly cash budget for Wareroom Trading Limited for the first three months of 2020 using a columnar format.
Question
The following information relates to Wareroom Trading Limited:
| Month | NOV 2019 | DEC 2019 | JAN 2020 | FEB 2020 | MAR 2020 |
|---|---|---|---|---|---|
| Sales (N) | 850,000 | 950,000 | 720,000 | 750,000 | 780,000 |
| Purchases (N) | 360,000 | 360,000 | 300,000 | 400,000 | 350,000 |
Additional information:
- All sales are on credit, collectible 50% in 30 days, 25% in 60 days, 20% in 90 days, and balance regarded as bad debts.
- All purchases are also on credit, payable 40% in 30 days and 30% each in 60 and 90 days respectively.
- A new generator costing N455,000 will be acquired in February under a 30-day credit agreement.
- An old car will be sold for N50,000 cash in February.
- Monthly salaries are N80,000 payable as and when due.
- Commission on sales is 5% payable to sales agents 2 months in arrears.
- Company income tax of N235,000 is due and payable in January.
- An investment is expected to bring in N60,000 gross in February, subject to 10% withholding tax.
- The staff Christmas party in December is expected to cost the company a total of N90,000, though 60% of the expenses will be pushed for settlement the month following.
- Assume an overdraft of N283,000 on 31 December 2019.
Required:
Prepare a monthly cash budget for Wareroom Trading Limited for the first three months of 2020 using a columnar format. (Total 20 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Budgeting, Cash Budget, Credit Purchases, Credit Sales, Financial planning
- Level: Level 1
- Topic: Business Process Technologies
- Series: MAR/JULY 2020
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- 1 Marks
FA – Mar/July 2020 – L1 – SA – Q20 -Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)
Determining the sales account balance based on cash and credit sales
Question
Iyabo started business on September 01, 2019. She made cash sales of N64,000 and issued invoices of N102,000 for credit sales of which N86,000 had been paid. What would be the balance in the sales account in the general ledger at the end of September?
A. N166,000
B. N102,000
C. N86,000
D. N80,000
E. N64,000
Find Related Questions by Tags, levels, etc.
Report an error