CASH BUDGT. Coursework

JUBA STUDY CENTRE
Student Name:
JOHN KULANG MOSES
Course:
BBA (Generic)
Student ID:
02/0032/1511323
Lecturer:
Gabriel Gai
Module:
Business Finance
Module Code:
BBM 2103
Assignment Number:
Two
Date Issued:
Due Date:
Assignment Brief:
Guide to Students
1 Maximum 10 pages word processed
2
Use Times New Roman
Font Size should be 12
1.5 Spacing
For referencing purposes use the Harvard Author-
Date System
Instructions to Students
1 This form must be attached to the front of your
assignment
2
The assignment must be handed in without fail by the

due date
Ensure that the submission form is date stamped at

reception when you hand it in
12/08/2016
Late submission will not be accepted unless with prior

agreement with the course Lecturer/Tutor
All assessable assignments must be word processed
a) A cash budget is a statement of planned cash receipts and disbursements. Cash budgets help
management avoid either unnecessary idle cash or unnecessary cash deficiencies. The cash
budget is heavily affected by the level of operations summarized in the budgeted income
statement. The factors affect that cash budget are discussed as follows:
i.
Overhead expenses and indirect costs. If the price you are paying for your overhead
exceeds the money you are bring in then this can become quite a problem as it will
ii.
definitely limit your cash flow.

A decrease in prices and payment performances of customers. When there is a
decrease in prices it will obviously affect how much money you have coming into the
business, as will customer performances. Although a decrease in prices will likely bring
in more customers, customer performance can also affect a company's cash flow;
iii.
especially poor performance.

Poor credit ratings with customers. Well, if they're paying with poor credit it's likely
that they won't be able to pay the money back which can set you back quite a bit,
iv.
especially if you have numerous customers buying on credit.

The economy. If the economy happens to go into a recession then businesses everywhere
are going to suffer and cash flow will suffer greatly as well. The economy plays a large
role in the amount of cash flow a company brings in.
b)
CASH BUDGET
For the month of June December, 2013
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
Sh.
Sh.
Sh.
Sh.
Sh.
Sh.
Sh.
Sh.
RECEIPTS
Balanced b/f
180,000
153,000
203,000
274,000
345,000
437,000
440,000
Receipts from
sales
159,000
166,000
187,000
197,000
188,000
182,000
192,000
Capital
Compensation
Received
40,000
20,000
619,000
632,000
Total
339,000
319,000
390,000
471,000
593,000
Payments
Payments to
creditors
110,000
90,000
90,000
80,000
130,000
140,000
60,000
Expenses
26,000
26,000
26,000
26,000
26,000
26,000
26,000
50,000
Retention
Money
50,000
Office
Equipment
18,000
186,000
116,000
116,000
156,000
156,000
179,000
86,000
Corporate tax
153,000
Workings:
203,000 274,000
315,000
437,000
440,000
546,000
1. Suppliers are paid one month after the delivery of goods. May purchase will be paid in June
and so on.
2. Receipts from Sales
a) JUNE
Sh.
60% of 160,000=
96,000
30% of 160,000=
48,000
10% of 150,000=
15,000
159,000
b) JULY
Sh.
60% of 170,000=
102,000
30% of 160,000=
48,000
10% of 160,000=
16,000
166,000
c) AUGUST
Sh.
60% of 200,000=
120,000
30% of 170,000=
51,000
10% of 160,000=
16,000
187,000
d) SEPTEMBER
Sh.
60% of 200,000=
120,000
30% of 200,000=
60,000
10% of 170,000=
17,000
197,000
e) OCTOBER
Sh.
60% of 180,000=
108,000
30% of 200,000=
60,000
10% of 200,000=
20,000
188,000
f) NOVENMBER
60% of 180,000=
Sh.
108,000
30% of 180,000=
54,000
10% of 200,000=
20,000
182,000
g) DECEMBER
Sh.
60% of 200,000=
120, 000
30% of 180,000=
54,000
10% of 180,000=
18,000
192,000
In Conclusion, The cash budget is an analysis of how much money the corporation will on hand
over the coming day, week, month or year. A company must base their cash budget on the cash
they have from the start of the period, the amount of money the company anticipates bringing in,
the expenses they will have to pay and whether the end balance will be positive or negative. That
ending balance will be the beginning balance the company will use for the cash budget for the
next cycle.
A cash budget is important because it helps to protect how a company will spend and earn money
for upcoming periods. The preparation of cash budget is essential because the procedure forces a
person to think about their expectations and plans for a foreseeable future. It is important to
follow the cash budget, unless unforeseen circumstances arise because complying to the cash
budget plan will discipline a company's spending.
Reference:
http://businessknowledgesource.com/finance/what_factors_affect_your_cash_flow_026455.html
http://www.principlesofaccounting.com/chapter21/chapter21.html
http://ecoursesonline.iasri.res.in/mod/page/view.php?id=25949

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JUBA STUDY CENTRE

JOHN KULANG MOSES

Use Times New Roman

Font Size should be 12

For referencing purposes use the Harvard Author-

The assignment must be handed in without fail by the

Ensure that the submission form is date stamped at

Late submission will not be accepted unless with prior

All assessable assignments must be word processed

definitely limit your cash flow.

especially poor performance.

especially if you have numerous customers buying on credit.

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