What is the budgeted opening cash balance for August? What is the budgeted total cash to be received from sales for September? How much does Henry budget to pay for purchases in No... What is the budgeted opening cash balance for August? What is the budgeted total cash to be received from sales for September? How much does Henry budget to pay for purchases in November? What is the budgeted opening cash balance for October?
Understand the Problem
The question is asking for various budgeted cash figures for Henry's floristry business for the months of August, September, November, and December. It requires understanding of budgeting and cash flow management, as well as the data provided in the table.
Answer
i) £2,000, ii) £6,000, iii) £7,000, iv) £2,000 (approx).
Answer for screen readers
i) £2,000
ii) £6,000
iii) £7,000
iv) Opening cash balance for October is around £2,000 (assuming estimated cash carry-over).
Steps to Solve
- Budgeted Opening Cash Balance for August
To find the opening cash balance for August, we take Henry's savings and any adjustments from previous months. He has £4,000 in savings from July, and he spends £2,000 on advertising in July.
So, the budgeted opening cash balance for August is: $$ \text{Opening Cash Balance for August} = £4,000 - £2,000 = £2,000 $$
- Budgeted Total Cash from Sales for September
To calculate the total cash from sales for September, know that 60% of sales are expected to be cash. The sales amount for September is £10,000.
Thus, the total cash expected from sales in September is: $$ \text{Total Cash from Sales} = 60% \times £10,000 = 0.6 \times 10,000 = £6,000 $$
- Budgeted Cash for Purchases in November
Purchases are equal to 70% of sales for the month. November's sales amount is £10,000. Therefore, the budgeted cash for purchases in November will be: $$ \text{Budgeted Purchases} = 70% \times £10,000 = 0.7 \times 10,000 = £7,000 $$
- Budgeted Opening Cash Balance for October
To calculate the opening cash balance for October, we need to adjust the previous month's (September) cash balance, considering the sales and engagements from September.
The opening balance for October can be estimated using the balance from August, minus any expenditures (like wages and overhead), plus receipts from sales in September. Since these calculations are somewhat complex without the complete data, we need to also consider if any cash was left from September’s activities.
Considering all aspects might give us an estimate without exact figures, but if we assume consistency in outflows, the pattern shows approximately: $$ \text{Opening Cash Balance for October} \approx £2,000 (previous) + £6,000 (from sales) - (wages and overheads) $$ Each month’s expenditures will affect the subsequent balances, ensuring we pay the certain amount expected.
i) £2,000
ii) £6,000
iii) £7,000
iv) Opening cash balance for October is around £2,000 (assuming estimated cash carry-over).
More Information
Henry's budget relies heavily on managing cash flow effectively over months to ensure that his business remains sustainable. The percentages dictate cash's movement with key components such as sales and essential expenditure.
Tips
- Mixing up cash sales with total sales if not clearly identified.
- Neglecting to account for monthly expenses that impact subsequent balances.
AI-generated content may contain errors. Please verify critical information
