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21. "Cash Budget - Problem No: 1" from Managerial/ Management Accounting Subject — Transcript

by Devika's Commerce & Management Academy · 2,536 words · 489 segments · language en · Watch on YouTube

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0:00hello dear students welcome to device
0:02commercial management academy
0:04when we are discussing about budgets
0:07different types of budgets we have seen
0:09practically we have done flexible budget
0:12sales budget
0:13now today we'll see cash budget one of
0:16the important budget
0:18interesting sub interesting budget and
0:21also easy once if you understand simple
0:24whenever student i used to work out
0:27comfortably happily especially flexible
0:29budget and cash budget format is also
0:32easy
0:33cash budget do you know cash account
0:37we used to write all the receipts on the
0:39debit side and payments on the credit
0:41side single column cash book double
0:43column cash book triple column cash book
0:45all the receipts debit side
0:47payments credit side
0:49from receipts if you deduct
0:51payments you'll be getting closing
0:54balance
0:55with opening balance we used to start
0:57recollected
0:58same thing but only the thing is we are
1:00presenting
1:02in a budget way
1:03cash budget
1:05focus this problem
1:08you will understand only one problem you
1:10can understand very clearly i need your
1:13attention today right now let's enter
1:15into the problem before going to the
1:17problem let me show you the proforma
1:19so when we want to prepare cash budget
1:21this is the program how many months we
1:23have we want to prepare cash budget for
1:26a example three months i am taking
1:28particular
1:30three months april may june or january
1:32february march okay so four columns how
1:35many months you want that much month you
1:37can extend it okay
1:39cash budget now we have to start with
1:41opening
1:42balance of cash
1:44so we'll say opening balance of cash
1:47and we'll give a heading of receipts all
1:49the receipts will write
1:51okay
1:52every month will total up
1:54then payments all the payments under
1:57this column receipts under this column
2:00and payments payments also will total
2:03receipts minus payments will be the
2:06closing cash that closing cash what we
2:10are going to get that will be the
2:11opening cash of next month
2:14first year always they'll give you
2:16opening balance of cash
2:18but
2:19this year this month the clos opening
2:21balance will be this month's closing
2:24balance closing balance will be opening
2:27balance in the same way may month
2:29closing balance whatever you get that
2:31will be the opening balance of
2:34june month
2:36go getting it perform performance like
2:38this
2:39now let's see the problem the problem is
2:42given like this understand slowly
2:45read it slowly
2:48and
2:49see that what they have given and how we
2:52have to work out
2:53very coolly how to understand the
2:55problem now the problem is here a
2:57company expecting
2:59to have
3:0232 000 cash in hand
3:05on first april 2019 means opening cash
3:09in the month of april
3:12opening cash okay
3:14prepare cash budget for three months
3:17three months what are the months april
3:19to
3:20june
3:21april may june that is why in the format
3:25i have written april may june
3:28okay opening balance of cash april month
3:31it is given how much
3:33where it is 32 000 we can write it here
3:36directly 32 000 opening balance
3:43okay now rest of the problems see
3:46different uh transactions are given it's
3:49related to the cash account only
3:50something it may be receipt or payment
3:54say for example months are here total
3:56five months are given but we are going
3:57to prepare april may and june these
4:00three months only we are going to
4:01prepare right
4:03so february march is only information
4:07what is the information given sales
4:09sales means receipt
4:11just like cash book
4:13says cash book what do you where do you
4:15write sales debit sell because it is
4:17income
4:18it's income okay receipt
4:21purchases when you are purchasing it's a
4:23payment you are making payment so this
4:26is payment
4:28recipient sales will write
4:30purchases payment okay
4:33wages expenses both are payments both
4:36will comes in payment side
4:38am i clear
4:39so this we are going to do and
4:42additional information very important
4:44you need to understand store slowly what
4:46is additional information period of
4:49credit allowed by suppliers is two
4:51months
4:52credit period of credit to suppliers
4:57credit to suppliers means
4:59this is the transaction related to the
5:01purchases
5:03suppliers are related to the purchases
5:06this much knowledge you have i think
5:08okay
5:09so there is a adjustment so i have
5:11written a star mark
5:14credit allowed by suppliers is two
5:16months two months delay is there
5:19when we take the amount we have to be
5:20very careful i will show you anyway
5:21while working out the problem just
5:23remember there is an adjustment related
5:24to the purchases next one
5:2825 of the sales is for cash
5:30sales also there is an adjustment
5:33i'll put a star mark here
5:3525 percent 25 percent of the sales is
5:38for cash
5:40means 75 percent is credit okay
5:43and the period of credit credit means 75
5:46percent
5:49this period of credit
5:51allowed to customers for credit sales is
5:54one month
5:55means there is a delay of one month
5:58credit sales how much is credit sales 75
6:0225 is cash sales here
6:05everything is 25 percent cash sales will
6:07take
6:08and credit sales of
6:10one month delay 75 percent okay
6:14this is related to the sale second point
6:16next
6:18delay in payment of wages and expenses
6:20one month wages and expenses here also
6:23we have adjustment
6:24so there is a delay of one month
6:28remember this
6:29next one income tax through 2028 000 is
6:33to be paid in june 2019
6:37in the month of june only you have to
6:39pay the income tax
6:41not in all the months that's all this is
6:44extra one not related to the data what
6:46we have given we'll take it lastly
6:49now how do we start the problem slowly
6:51observe
6:53first thing is that opening cash we have
6:56already written 32 000 which is given
6:58over there
6:59next we'll see the sales
7:02sales is
7:04income receipt okay related to the sales
7:07what is the adjustment given
7:09ah period of credit allowed by suppliers
7:12now this is related to the purchases
7:15sales adjustment is here 25 of the sales
7:18is for cash
7:20we'll say cash sales under this receipts
7:22column
7:23cash sales
7:26it is 25 percent
7:30okay 25 percent on three months sales
7:34now this is 96 000 into
7:37uh 25 percent
7:4324 000
7:48are you understanding
7:50these three months we are taking
7:52uh 25 percent 96 000 into 25 percent
7:56you got this much in the same way one
7:58lakh into 25 percent
8:01one lakh into 25 percent is 25 000 only
8:03so i'll write here 25 000.
8:07in the same one lakh 20 000 into 25
8:09percent 1 lakh 20 thousand into
8:12twenty five percent thirty thousand
8:15thirty thousand i have written here
8:19up to here no doubt
8:21now coming to the credit sales credit
8:23sales are seventy five percent but
8:26allowed to the customers
8:28uh for the period of one month means one
8:30month delay is there first we'll write
8:33credit sales
8:4075 percent
8:42one month
8:45for our understanding i have written in
8:47the
8:48brackets 75 percent one month one month
8:51the delay is there
8:54means we want actually april
8:56april
8:58we are going to take it on
9:00march
9:02one month delay is there so that is why
9:05on 80 000
9:06will calculate 75 percent
9:10where can i show this calculations
9:11[Music]
9:13here
9:1580 000 into
9:19into 75 percent
9:25into 75 percent it is 60 000
9:30okay
9:31so 60 000 are the credit sales
9:37one month delay now so april we have
9:39taken for march
9:42and for may will take for april
9:45so this is
9:47march
9:50sorry april
9:52but we have taken one month before
9:55one month delay is there for
9:59may
10:02for may will take one month before
10:05one month delay is there no so we'll
10:07take april month ninety six thousand
10:10ninety six thousand into
10:12seventy five percent
10:2072 000
10:25so this is 72 000
10:30in the same way for the month of april
10:32may june now next june
10:35june also will take
10:37april month amount
10:39one month delays they know so sorry
10:42month
10:43june means we'll take for may month 1
10:45lakh
10:461 lakh into
10:4775 percent
10:50it is 75 000
10:5475 000 i am writing here
10:58you need to be very careful while
11:01calculation this calculation you must
11:03understand once again i'll explain
11:06see
11:0725 percent is cash sales
11:1025 percent cash sales means on all these
11:13ninety six thousand twenty five percent
11:15one like twenty five percent
11:17one like twenty thousand twenty five
11:18percent that we have calculated and we
11:20have written here twenty four twenty
11:22five thirty
11:24rest of the seventy five percent is that
11:25is the delay of one month
11:28delay of one month for april
11:31we have taken march amount eighty
11:34thousand into seventy five percent
11:37for may we have taken ninety six
11:39thousand for may ninety six thousand
11:40seventy five percent
11:42for june we have taken for may month
11:46month amount is one lakh one lakh into
11:48seventy five percent like this
11:50seventy five percent one month delay we
11:53have calculated and we have written over
11:55there
11:56so sales is over
11:59next one purchases
12:01related to the purchase also there is an
12:03adjustment what is that
12:05period of credit allowed by suppliers is
12:08two months
12:09delay of two months
12:11okay so now purchases comes under
12:14payments column so we'll write first
12:16purchases
12:22there is a delay of two months
12:27two months means april amount
12:30april amount purchases is here no april
12:33amount will take it forty four thousand
12:35two months delay is there if one month
12:37delay we could have taken fifty six
12:39thousand two months delay means forty
12:41four thousand okay forty four thousand
12:48april is over now for may month will
12:50take two months delay means fifty six
12:52thousand
12:57and for june month
12:59june month delay means two months delay
13:01sixty thousand will take
13:06it means two months delay is there means
13:08we have started taking from forty four
13:11thousand fifty six thousand and sixty
13:13thousand okay forty four fifty six sixty
13:16forty four fifty six sixty
13:18okay this is purchases are over next
13:21wages and expenses they said
13:24delay in payment of wages and expenses
13:26one month
13:27one month delay is there so wages and
13:30expenses are payments we'll write here
13:33wages
13:36one month delay
13:39and also
13:41expenses
13:46expenses also one month delay
13:51one month delay means april means will
13:53take nine thousand
14:00may means april's will take 9000
14:06and for june means one month delay means
14:0811 000
14:12in the same expenses expenses also there
14:15is a delay of one month right one month
14:17delay means
14:18for april month will take six thousand
14:25for may month will take seven thousand
14:28one month before we are taking
14:30seven thousand
14:33and uh for june we'll take nine thousand
14:39okay these four transactions we have
14:42taken out of these four transactions
14:44only only one is received that is sales
14:47sales cash sales 25 credit sales 75
14:51okay and uh purchases wages and expenses
14:54three are payments payments that we have
14:57written delay how much delay is there
14:59according to that posting which amount
15:01you have to take that you need to be
15:02very careful okay three transactions
15:05three adjustments are over now last one
15:07income tax 28 000 is to be paid in
15:10june
15:12income tax pay means payment side okay
15:15income tax
15:21income tax is how much 28 000 only in
15:24the month of june june means 28 000 here
15:27only will take
15:2928 000 in the month of june but not in
15:33rest of the months april june no
15:36over posting is over now we have to
15:38close each and every month carefully
15:41first what we'll do
15:42we'll
15:44see the total
15:46receipts
15:58total receipts if you see thirty two
16:01thousand
16:03plus twenty four thousand
16:06plus sixty thousand
16:09just one lakh sixteen thousand
16:16and here total payment
16:28total payment is here 44
16:309000
16:33plus
16:349000 six thousand
16:38it is fifty nine thousand okay
16:48now how do you get closing cash
16:501 lakh 16 000 minus 59 000
16:54so closing cash
17:00cash is
17:01[Music]
17:03i think you are understanding okay
17:06if i write 1 lakh 16 minus 59 000 for
17:09rest of the months it will be changing
17:11so
17:121 lakh 16 000 minus 59 000
17:19it is 57 000
17:3157 000 is the closing cash
17:35now this will be the opening cash of
17:38next month
17:39so opening cash is same one 57 000.
17:46now if you total the
17:48receipts 57 000 plus
17:5225 000
17:54plus 72 000
17:56it is one lakh fifty four thousand
18:02and payments
18:0656 000 plus
18:099 plus 7 16 000
18:13seventy two thousand
18:17how do you get the closing cash of me
18:19month
18:20receipts minus
18:22uh payments one lakh fifty four thousand
18:25minus
18:26seventy two 000
18:3082 000
18:32so this is closing cash in the month of
18:35may
18:36so this will be the opening cash in the
18:38month of june 82 000 will write here
18:45now if you total this
18:48eighty two thousand plus
18:50thirty one lakh five thousand you can
18:52take directly
18:55one like eighty seven thousand
19:02and this total
19:04sixty plus eleven seventy one thousand
19:07seventy one plus nine
19:09eighty thousand
19:11eighty plus
19:12twenty eight thousand one lakh eight
19:14thousand
19:19anyway let me check it once
19:22seventy one thousand plus
19:26nine thousand plus twenty eight thousand
19:30yeah one lakh eight thousand now the
19:32difference between these two
19:34one lakh eighty seven thousand minus
19:37one lakh
19:38eight thousand it is seventy nine
19:40thousand
19:45so
19:46that's it cash budget is over
19:49every month how much you are having
19:51opening balance how many
19:53receipts are there
19:55and
19:56how many payments are there at the end
19:59of the month how much is the closing
20:00balance you got it very clearly this is
20:03important
20:04every month april month you got receipts
20:07of this much
20:08and payments of this
20:11and end of the april you have balance of
20:1357 000. 57 000 you are transferring to
20:17the opening balance of next month may
20:20and may month
20:22total receipts and total payments so may
20:25month closing balance is 82 000. one
20:28lakh fifty four thousand minus seventy
20:30two thousand and this will be the
20:31opening balance of next june
20:34and june month the total receipts are
20:37this much payments are this much so
20:38closing balance is 79 000 that is one
20:41like 87 000 minus one like eight
20:43thousand that's all simple
20:45clear
20:47if you focus
20:48i think you can
20:49you understood it
20:51take a screenshot or pause the video and
20:53note down
21:01if you understood this problem
21:04i can say that cash budget is easy
21:07you're perfect you can work out any
21:09problem
21:10more or less a little bit adjustments
21:12are the proforma you understood how to
21:14post it and how to
21:17focus on the adjustments everything is
21:19you got it
21:21if possible
21:22you see the problem
21:24work out it once and second time without
21:27looking at the answer you try to work
21:29out take out your test book start
21:32working out more problems if you
21:34understood it your confidence will
21:36develop a lot
21:37stay connected check out the playlist
21:40or description box for more subjects and
21:43please don't forget to forward these
21:45videos practice well good luck

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