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

Accounting assessment1 ohio corporation sells its product

Accounting Assessment 1. Ohio Corporation sells its product for $16 per unit and incurs variable costs of $10 per unit and total fixed costs of $12,000. What is Ohio Corporation's break-even point for sales of this produ ...

Managerial accounting assignment questionwidget airlines is

Managerial Accounting Assignment Question Widget Airlines is a leading business in travelling industry and has experienced turbulent times during the past 10 years due to stiff competition and as a result of global slowd ...

Assignemnt decision making with managerial accountingdue to

Assignemnt: Decision Making with Managerial Accounting Due to varying business characteristics, the managerial accounting techniques applied in each business may differ. For example, a business in the start-up phase may ...

Suppose a firm has had the following historic sales

Suppose a firm has had the following historic sales figures: 2009: 1,450,000 2010: $ 1,710,000 2011 : $ 1,600,000 2012: $ 2,000,000 2013: $ 1,850,000 What would be the forecast for next year's sales using regression to e ...

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 ...

May airlines is a leading business in travelling industry

May Airlines is a leading business in travelling industry and has experienced turbulent times during the past 10 years due to stiff competition and as a result of global slowdown in the world economy. It has now emerged ...

Exploring potential research topicsdo the following to

Exploring Potential Research Topics Do the following to complete this assignment: • Based on your business experience and the information accumulated in this class, identify three possible research topics related to the ...

Suppose a firm has had the historical sales figures shown

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using REGRESSION to estimate a trend? 2008: $2,000,000 2009: $1,800,000 2010: $2,200,000 2011: $2,400 ...

The facts and figures relating to irrigation corporation

The facts and figures relating to Irrigation Corporation are as follows. Irrigation Corporation produces plastic garden sprinklers. The company is preparing its budget for 2016. The first step is to plan for the first qu ...

Free cash flow you are considering an investment in cruise

Free Cash Flow: You are considering an investment in Cruise, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Cruise earned an EBIT of $206 million, paid taxes of $47 million, ...

  • 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