Module 6: [4 marks] Larry and Janice have retained an accountant to better understand their cash
position in their projected first year of operations. The accountant has reviewed their latest
projections for this year and since they were planning to go ahead with their business, he/she was
keen to help them prepare a cash budget for the first 6 months. He/she advised the Martins that it
was imperative that they preserve liquidity in this first phase of their business. Several
assumptions need to be reflected in the cash budget. Revenues are estimated to be $50,000
monthly for the lirst quarter, and $60,000 monthly for the second quarter; it is estimated that 40%
of the customers will pay immediately, and 60% will pay between 30 and 60 days. Their coGS is
estimated to be 50% of revenues, and the accountant suggested that 50% of their COGS should
be paid at the time of purchase with the remaining 50% delayed until the next month. Salaries of
$7,000 per month, Lease Costs of $1,083 per month, Advertising of $1,000 per month. Travel
Costs of $167 per month and Financing costs of $833 per month need to be accounted. Tax
installments of $4,000 need to be recorded in March and June. Assuming CompuTech will begin
operations with a Cash Balance of $15,000 on January 1, complete a Cash Budget for the Martins
to share with their accountant. Present negative values in red font. Are there any concerns that
should be addressed?.
Module 6 4 marks Larry and Janice have retained an accoun.pdf
1. Module 6: [4 marks] Larry and Janice have retained an accountant to better understand their cash
position in their projected first year of operations. The accountant has reviewed their latest
projections for this year and since they were planning to go ahead with their business, he/she was
keen to help them prepare a cash budget for the first 6 months. He/she advised the Martins that it
was imperative that they preserve liquidity in this first phase of their business. Several
assumptions need to be reflected in the cash budget. Revenues are estimated to be $50,000
monthly for the lirst quarter, and $60,000 monthly for the second quarter; it is estimated that 40%
of the customers will pay immediately, and 60% will pay between 30 and 60 days. Their coGS is
estimated to be 50% of revenues, and the accountant suggested that 50% of their COGS should
be paid at the time of purchase with the remaining 50% delayed until the next month. Salaries of
$7,000 per month, Lease Costs of $1,083 per month, Advertising of $1,000 per month. Travel
Costs of $167 per month and Financing costs of $833 per month need to be accounted. Tax
installments of $4,000 need to be recorded in March and June. Assuming CompuTech will begin
operations with a Cash Balance of $15,000 on January 1, complete a Cash Budget for the Martins
to share with their accountant. Present negative values in red font. Are there any concerns that
should be addressed?
![Module 6: [4 marks] Larry and Janice have retained an accountant to better understand their cash
position in their projected first year of operations. The accountant has reviewed their latest
projections for this year and since they were planning to go ahead with their business, he/she was
keen to help them prepare a cash budget for the first 6 months. He/she advised the Martins that it
was imperative that they preserve liquidity in this first phase of their business. Several
assumptions need to be reflected in the cash budget. Revenues are estimated to be $50,000
monthly for the lirst quarter, and $60,000 monthly for the second quarter; it is estimated that 40%
of the customers will pay immediately, and 60% will pay between 30 and 60 days. Their coGS is
estimated to be 50% of revenues, and the accountant suggested that 50% of their COGS should
be paid at the time of purchase with the remaining 50% delayed until the next month. Salaries of
$7,000 per month, Lease Costs of $1,083 per month, Advertising of $1,000 per month. Travel
Costs of $167 per month and Financing costs of $833 per month need to be accounted. Tax
installments of $4,000 need to be recorded in March and June. Assuming CompuTech will begin
operations with a Cash Balance of $15,000 on January 1, complete a Cash Budget for the Martins
to share with their accountant. Present negative values in red font. Are there any concerns that
should be addressed?](https://image.slidesharecdn.com/module64markslarryandjanicehaveretainedanaccoun-230322032646-4d335e11/85/Module-6-4-marks-Larry-and-Janice-have-retained-an-accoun-pdf-1-320.jpg)
