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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