Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Managerial Accounting Expert

problem 1: Wan Group plans to incorporate a company to be known as Wan Group Ltd for the distribution of locally made automotive spare parts. They intend to contribute an initial capital of Sh.45,000 in cash. After approaching his bank manager for financial support, they were asked to submit projected statements of the profits and cash flows of the business for the next four months commencing 1 July 2008. After careful analysis, Wan Group gathered the following information relating to the business operations for the six months to December 31,2008:

A) At the begging of July operating furniture and equipment will be acquired for cash at a total cost of sh.88,000. In addition, stocks costing Sh.50,000 will be acquired out of which half will be paid for in cash and the balance in the following month.

B) Stock levels will be maintained at a level that is sufficient to satisfy sales for the next month. The company intends to earn a gross margin of 50% on sales. Credit terms from suppliers require payment after one month form the date of purchase.

C) Sales are expected to average Sh.60,000 per month for the next one year.  It is expected that 75 per cent of customers will pay in cash and 25 per cent will take credit. All credit sales are due within 30 days.

D) The following monthly expenses will be incurred:

Rent – Sh.10,000; Salaries – Shs.6,000;   Miscellaneous expenses – Sh.2,500; Depreciation – Sh.3,000.
All expenses will be paid for in the month in which they are incurred, except for rent, which is payable quarterly in advance.

E) The proprietor expects to withdraw Shs.5,000 from the business every month for personal use.

Required:

Prepare a cash budget for each of the months of July, August, September and October 2008 for Wan Group Ltd. The budget should be columnar form and all supporting workings should be shown.   

problem 2:

Onatracom Company, a manufacturer of retread tyres has provided the following information about operations during the financial year ended 30 September 2010.

1450_Financial year information.jpg

The unit selling price for the company’s product is shs.600.

Required:

a) Draft the profit and loss statements of Onatracom Company using both marginal costing and absorption costing approaches.

b) describe the difference in profits under the two methods.

Managerial Accounting, Accounting

  • Category:- Managerial Accounting
  • Reference No.:- M93768

Have any Question? 


Related Questions in Managerial Accounting

Managerial accounting assignmentanswering the questions and

Managerial Accounting Assignment Answering the questions and compiling your answers into a word processing document. 1. The work in process inventory account of a manufacturing company shows a balance of $3,000 at the en ...

Managerial accounting budgeting project- springthe

Managerial Accounting Budgeting Project- Spring The following is a Comprehensive Budgeting Problem. You and your team need to prepare a partial Master Budget and then continue on to analyze your data. This is an Excel ba ...

Factoring resource constraints into product mix

Factoring resource constraints into product mix decisions Rose Incorporated manufactures two types of vases, small and large. The following per-unit data are available.                                                 Sma ...

Wyoming community college has three divisions liberal arts

Wyoming Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college's comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar's De ...

You have almost convinced yourself that there might be a

You have almost convinced yourself that there might be a successful business in the idea of bringing senior citizens together in arcades to play various games on Wii (or something similar). You think about how people lik ...

Which career is for you please respond to the

"Which Career is for You?" Please respond to the following: • Compare and contrast the key responsibilities of certified management accountants and certified public accountants. Select the career path that you plan to pu ...

Your company has spent 390000 on research to develop a new

Your company has spent $390,000 on research to develop a new computer game. The firm is planning to spend $59,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized a ...

Tri-county cable services inc is organized with three

Tri-County Cable Services, Inc., is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow. Metro Suburban Outlying Service revenue $ 1,050,000 $ 850,000 $ 45 ...

Analysis last year pjs ice cream parlors inc reported an

Analysis Last year, PJ's Ice Cream Parlors, Inc. reported an ROE = 12.0%. The firm's debt ratio was 40%, sales were $25 million, and the capital intensity ratio was .75 times. What is the net income for PJ's last year? ( ...

Accounting paperwrite a 1000 - 1250 word paper on the

Accounting Paper Write a 1,000 - 1250 word paper on the following topic: Describe the role of managerial accounting in contemporary business. Provide one specific, real-life example of how managerial accounting helps man ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen