From the cash budget, identify 2 cash flow problems

5. Cash Budget for Green Energy Solutions Ltd
£ £ £
May June July
OPENING BALANCE 20,000 (3,000) (2,000)
RECEIPTS
Sales Revenue 2,000 8,000 13,000
TOTAL 22,000 5,000 11,000
PAYMENTS
Purchases 1,000 2,000 3,500
Wages 3,000 4,000 4,000
Advertising 1,000 1,000 1,000
Purchase of Motor Van 20,000 0 0
TOTAL 25,000 7,000 8,500
CLOSING BALANCE (3,000) (2,000) 2,500
(a) (i) From the cash budget, identify 2 cash flow problems.
(ii) Describe how the problems identified in part (a)(i) could be solved.
(b) From the cash budget, identify an example of:
(i) a fixed cost;
(ii) a variable cost.
(c) Outline the purposes of producing an income statement.
6. (a) Describe the methods of production.
(b) Outline the factors an organisation might consider when choosing a supplier.
(c) Explain the possible problems of:
• under-stocking;
• over-stocking.


 

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