Fred and Sally own a profitable business that deals in windsur fing equipment. They are the only UK agents to impor t Dr yline” sails from Germany, and in addition to this they sell a variety of boards and miscellaneous equipment that they buy from other dealers in the UK.
Two years ago they diversified into custom-made boards built to individual customer requirements, each of which was supplied with a Dr yline” sail. In order to build the boards, they have had to take over larger premises, which consist of a shop front with a workshop at the rear, and employ two members of staff to help.
Demand is seasonal and Fred and Sally find that there is insufficient work during the winter months to pay rent for the increased accommodation and also wages to the extra two members of staff. The four of them could spend October to March in Lanzarote as windsur f instructors and close the UK operation down in this period. If they did, however, they would lose the Dr yline” agency, as Dr yline insists on a retail outlet in the UK for 12 months of the year. Dr yline sails constitute 40% of their turnover and carry a 50% mark-up. Trading has been static and the patter n is expected to continue as follows for 1 April 20X5 to31 March 20X6: Sales of boards and equipment (non-custom-built) with Dr yline agency: 1 April30 September£120,000; of this 30% was paid by credit card, which involved one month”s delay in receiving cash and 4% deduction at source.Sixty custom-built boards 1 April30 September £60,000; of this 15% of the sales price was for the sail (a Dr yline” 6 m2 sail costs Fred and Sally £100; the average price for a sail of the same size and quality is £150 (cost to them)).
Purchasers of custom-built boards take an average of two months to pay and none pays by credit card.
Sales 1 October31 March of boards and equipment (non-custom-built) £12,000, 30% by credit card as above.
Six custom-built boards were sold for a total of £6,000 and customers took an unexplainable average of three months to pay in the winter.
Purchases were made monthly and paid for two months in arrears.
The average mark-up on goods for resale excluding Dr yline” sails was 25%. If they lose the agency, they expect that they will continue to sell the same number of sails, but at their average mark-up of 25%. The variable material cost of each custom-made board (excluding the sail) was £500. Other costs were:
Wages to employees £6,000 p.a. each (gross including insurance).
Rent for premises £6,000 p.a. (six-monthly renewable lease) payable on the first day of each month.
Other miscellaneous costs:
1 April30 September £3,000
1 October31 March £900.
Bank balance on 1 April was £100.
Salary earnable over whole period in Lanzarote:
Fred and Sally £1,500 each _ living accommodation
Two employees £1,500 each _ living accommodation All costs and income accruing evenly over time.
Required:
(i) Prepare a cash budget for 1 April 20X5 to 31 March 20X6 assuming that:
(a) Fred and Sally close the business in the winter months.
(b) They stay open all year.
(ii) What additional information would you require before you advised Fred and Sally of the best
course of action to take?
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Our Services
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
Essays
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admissions
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Reviews
Editing Support
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
Reviews
Revision Support
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.