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Unit 4 - Cash Budgeting 3
Unit 4 - Cash Budgeting 3
Unit 4
Cash Budgeting 3
Paula’s Planning reported the following Budgeted Income Statement for the months of July,
August, September and October, 2013. Note that July 2013 was the first month of the
company’s existence, and that the owner deposited $5,000 on July 1 into the company’s bank
account to get things started.
a. Calculate and forecast for Paula’s Planning cash availability (for September to
December) given the following information.
b. Please compare each month’s EBIT figure with the ending cash balance. Are they the
same? Why or why not?
Gross Profit
Of the Conference Revenue, 40% is received in the current month and the
remainder is received in the following month.
Of the Catering Revenue, 100% is received in the current month
Of the cost of sales, 80% is paid in the current month and the remainder is paid
in the following month
Of the Cleaning Supplies Expense, 100% is paid in the current month
Linen, and paper expenses are paid the month they are incurred.
Depreciation expense is $300 per month.
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Paula’s Planning
Cash Availability
September to December 2013
Quarter
July August September October
Cash Receipts:
Cash Disbursements:
Cleaning expense
Linen expense
Depreciation expense
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