Budgeting

Revision for Test

Budgeting is estimating what will happen next month or quarter

Estimations January February March

Cash Sales 14500 14850 14600

Wages 2100 4850 5100

Advertising 300 400 500

Cleaning Expenses 320 320 320

Stock 2000 2200 2400

Office Expenses 100 100 100

Payments to Creditors 3250 3250 3250

Record the Anticipated Receipts and total them

Estimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated Payments

Record the Anticipated Payments and total them

Estimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated PaymentsWages 2100Advertising 300Cleaning Expenses 320Stock 2000Office Expenses 100Payments to Creditors 3250Total Payments 8070

Calculated Cash Flow by subtracting the Total Payments from the Total Receipts

Estimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated PaymentsWages 2100Advertising 300Cleaning Expenses 320Stock 2000Office Expenses 100Payments to Creditors 3250Total Payments 8070Cash Flow for the quarter 6430

Add in the Bank at BeginningEstimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated PaymentsWages 2100Advertising 300Cleaning Expenses 320Stock 2000Office Expenses 100Payments to Creditors 3250Total Payments 8070Cash Flow for the quarter 6430Bank at beginning 3200Bank at end

Add the Cash Flow for the quarter to the Bank at beginning to get Bank at end

Estimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated PaymentsWages 2100Advertising 300Cleaning Expenses 320Stock 2000Office Expenses 100Payments to Creditors 3250Total Payments 8070Cash Flow for the quarter 6430Bank at beginning 3200Bank at end 9630

Transfer Bank at end to Bank at start

Estimated Receipts January February MarchCash Sales 14500Total Receipts 14500Less Estimated PaymentsWages 2100Advertising 300Cleaning Expenses 320Stock 2000Office Expenses 100Payments to Creditors 3250Total Payments 8070Cash Flow for the quarter 6430Bank at beginning 3200 9630Bank at end 9630

Repeat for the next monthEstimated Receipts January February MarchCash Sales 14500 14850Total Receipts 14500 14850Less Estimated PaymentsWages 2100 4850Advertising 300 400Cleaning Expenses 320 320Stock 2000 2200Office Expenses 100 100Payments to Creditors 3250 3250Total Payments 8070 11120Cash Flow for the quarter 6430 3730Bank at beginning 3200 9630 13360Bank at end 9630 13360

And then the final monthEstimated Receipts January February MarchCash Sales 14500 14850 14600Total Receipts 14500 14850 14600Less Estimated PaymentsWages 2100 4850 5100Advertising 300 400 500Cleaning Expenses 320 320 320Stock 2000 2200 2400Office Expenses 100 100 100Payments to Creditors 3250 3250 3250Total Payments 8070 11120 11670Cash Flow for the quarter 6430 3730 2930Bank at beginning 3200 9630 13360Bank at end 9630 13360 16290

Now make sure you have completed:

• Budgeting Exercise – hand in Bloomin’ Florests

• Budgeting Homework Yassmin Travel and Tours.

• Tom’s House of Horror – if you’ve finished all the exercises.

• Something to take home and study for the Budgeting Test e.g. Tom’s House of Horror or Pauline’s – photocopy (available up the front).

Test on Budgeting

Will be on XXth August 20XX