BUS1AFB Accounting And Finance For Business Individual Assignment

Question 1 (5 marks)

You are the manager of Pools Galore who are in the business of selling inground pools and landscaping to high end customers. At 1 January 2021, the business had a bank balance of $124,000. Provided below are estimates for receipts and payments for the three months ending 31 March 2021.

Sales are received as follows:
50% in month of sale
30% in month following sale
20% in second month following sale

Required (approximately 250 words):

a) You are to prepare a monthly cash budget for the three months ending 31 March 2021 to calculate an expected cash at bank figure which your accountant will review. Please ensure you include an overall total column and show all your workings as marks are allocated between workings and the final answer. Note: It is recommended you compile your cash budget in excel and copy it into your word report.

b) Explain the importance of the Cash Budget to the business and how it helps the business to manage its finances.

c) Based on the budget you have compiled, draw an overall conclusion as to the current Cash position of Pools Galore. This answer will be reviewed based on the calculations you have compiled so please ensure your answer is consistent with your figures.