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# Calculate and analyze the following profitability, financial stability and assets utilization ratios

Required:

a. Prepare a schedule of expected cash receipts from debtors for January and February, 2018, support your answer with calculations (You must show a total column for the two months). b. Prepare a cash budget for the two months ended February 28, 2018 showing the expected cash balance at the end of the each month (you must show a total column for the two months). c. On February 28, 2018, the business instalment of \$ 80, 000 will be due on the new machinery. Will Hamilton manufacturers be able to pay the instalment? Explain your answer with relevant calculations. Q2.2: Sweet Limited buys purchases marshmallows for \$4 and sells them for 5.5. Sales for Marshmallows (in units) are budgeted as follows: October 22,000; November 27,000; December 32,000; and Jan 30, 000. Actual sales (in units) were: August 18,000; Sept 18,000; Sweets Limited has a target of finished inventory to be 30% of the following month’s unit sales. Sales are 90% in cash and 10% in credit. Credit customers pay the month following the sale. Payment for purchases is made two months after the date of purchase. The budgeted cash balance as at 1 October 2018 is \$ 17,000. a. Prepare a sales budget (Units and \$) for the quarter ended Oct – Dec 2018 (for the months and total for the quarter b. Prepare a purchase budget (Units and \$) for the quarter ended Oct – Dec 2018 (for the months and total for the quarter) c. Prepare a cash budget for the quarter ended Oct – Dec 2018 (for the months and total for the quarter) d. Explain the purpose and at least one limitation of variance analysis.