Accountingfornonaccountingstudents8/e

JohnRDyson

Additional Questions

Chapter15Budgeting
Theanswerstothesequestionsareavailabletolecturers.

O15.1Thefollowingbudgetedtrading,profitandlossaccountsandbalancesheets
relatingtothethreemonthsto31March2012havebeenpreparedforRamsey
Limited.

Tradingandprofitandloss January February March

accounts
000 000 000
Sales 200 300 400
Openingstock 15 20 30
Purchases 145 220 330
160 240 360
Less:closingstock 20 30 80
140 210 280
Grossprofit 60 90 120
Less:expenses 20 30 40
Profit 40 60 80

Balancesheetsat 1.1.12 31.1.12 28.2.12 31.3.12

000 000 000 000
Fixedassetsatcost 390 400 410 420
Less:accumulated
depreciation 155 160 166 180
235 240 244 240

Investment 18 50 35 60

Currentassets
Stocks 15 20 30 80
Tradedebtors 20 25 45 100
Prepayments 2 2 3 10
Cashandbank 4 3 2
41 50 80 190

Currentliabilities
Bankoverdraft 8
Tradecreditors 35 40 50 90
Accruals 3 4 3 2
Taxation 30 30
Dividends 20 20
88 94 53 100

Debentureloans 4
___ ___ ___ ___
206 246 306 386

Capitalandreserves
Sharecapital 200 200 200 240
Profitandlossaccount 6 46 106 146
___ ___ ___ ___
206 246 306 386

Note:Itisnotexpectedthattherewillbeanydisposaloffixedassetsduringthe
threemonthsto31March2012.

Required:
PrepareRamseyscashbudgetforeachofthethreemonthsto31March2012.

O15.2 BDLimitedhasrecentlyprepareditsdraftbudgetfortheyearto30June
2012,thedetailsofwhichareasfollows:

1)Sellingpriceperunit:productB 400
perunit:productD 900

2)Salesdemand:productB 1,000units
:productD 500units

3)Directmaterialsrequiredperunit A1 B2
ProductB 5kg. 3kg.
ProductD 2kg. 6kg.

4)Directmaterialcosts:A1 3perkg.
:Bs 2perkg.

5)Directlabourhours:productB 4
:productD 10

6)Directlabourrateperhour 9

7)Rawmaterialstocks: At1.7.08 At30.6.09
A1(at3perkg.at1.7.08) 400kg. 300kg.
B2(at2perkg.at1.7.08) 200kg. 500kg.

8)Stockissueandpricingmethods:FIFO(firstin,first
out)

9)Finishedgoodsstock: At1.7.08 At30.6.09
ProductB(valuedat300perunit) 200 100
ProductD(valuedat800perunit) 50 150

10)Variablecostperdirectlabourhour 20

11)Fixedcostsperannum 480,000

12)Costingmethod:absorptioncosting

Required:

Preparethefollowingbudgetsfortheyearto30June2012:

1) productionbudget(inunits);
2) rawmaterialpurchasesbudget(inunitsands);
3) productioncostbudget;
4) budgetedtradingaccount.