Question

[mmmmm]

In the 'unit 4 outcome 2: assessment task A', question 1.1.1, where we have to work out the budgeted receipts from debtors, where did they get the 157 000 from? I got 130 000. :S 

Thanks!

[eeps]

I think in this question, you take the BALANCE of Debtors Control ($27,000) from the Trial Balance. Then you would debt Credit Sales of $162,000. On the credit side you would put the ending balance of $32,000 (which comes from the bit where its says "including $32,000 for December 2011", since this is owing in the next reporting period - debtors usually pay in the month following the sale.)

IF you add $27,000 and $162,000 then that will give you $189,000. you subtract $32,000 (ending balance) from $189,000 which would then give you the Budgeted Receipts from Debtors (aka Bank) which is $157,000.

I think the ending balance of $32,000 is probably the trickiest to work out.

Hope this makes sense!

[mmmmm]

I think in this question, you take the BALANCE of Debtors Control ($27,000) from the Trial Balance. Then you would debt Credit Sales of $162,000. On the credit side you would put the ending balance of $32,000 (which comes from the bit where its says "including $32,000 for December 2011", since this is owing in the next reporting period - debtors usually pay in the month following the sale.)

IF you add $27,000 and $162,000 then that will give you $189,000. you subtract $32,000 (ending balance) from $189,000 which would then give you the Budgeted Receipts from Debtors (aka Bank) which is $157,000.

I think the ending balance of $32,000 is probably the trickiest to work out.

Hope this makes sense!

Yup, yup. Got it! Thanks
I subtracted 32000 from 162000 because i thought that was what the debtors paid :S

Thanks heaps!

[LFTM]

Im going to post my question here cos its related to the outcome too.
With the budgeted cash flow statement Payment of wages accrued as at 31 December 2010 $2400, is this the amount from the trial balance as at 31 dec 2010?

[eeps]

Im going to post my question here cos its related to the outcome too.
With the budgeted cash flow statement Payment of wages accrued as at 31 December 2010 $2400, is this the amount from the trial balance as at 31 dec 2010?

Yep. (I'm assuming you mean the "Melven Stars - Trial Balance as at 31 December 2010")

SO in the Budgeted Cash Flow Statement, you would have the "Wages Paid" of $58,600 and the "Accrued Wages" of $2400 (noting that you would have them as separate CASH OUTFLOWS.)

THE Accrued Wages of $3200 ISN'T put in the Budgeted Cash Flow Statement.

[_avO]

Whichever one that's from the previous period (i.e. Balance sheet extract as at 31 December 2009) should be put in the budgeted cash flow statement as Accrued Wages and is deducted from "Wages Paid"
Note: Wages Paid less Accrued Wages (from 2009) i.e. Wages should also be put in the cash flow statement

[_avO]

I think in this question, you take the BALANCE of Debtors Control ($27,000) from the Trial Balance. Then you would debt Credit Sales of $162,000. On the credit side you would put the ending balance of $32,000 (which comes from the bit where its says "including $32,000 for December 2011", since this is owing in the next reporting period - debtors usually pay in the month following the sale.)

IF you add $27,000 and $162,000 then that will give you $189,000. you subtract $32,000 (ending balance) from $189,000 which would then give you the Budgeted Receipts from Debtors (aka Bank) which is $157,000.

I think the ending balance of $32,000 is probably the trickiest to work out.

Hope this makes sense!

Hmm you could have also assumed that the 27000 from previous period was paid in this period, in addition to the (162000-32000=) 130000 paid this period totaling to the same amount of 157000

However this method is not the conventional way when reconstructing an account

[_avO]

Question: From the same outcome as above

Does "Wages Paid" (2011) include Accrued Wages incurred from the previous period? (2010)
The answer says not, but my teacher says it does!! O.o

[eeps]

I don't know exactly which question you mean... but...

I think the Accrued Wages would be part of the "Wages Paid", but you would have them as separate items in the Cash Flow Statement. THE $2400 of Accrued Wages (2010) would be part of the $58,600 - Wages Paid. I don't think you deducted it though, it's to show that the WAGES owing (from the previous reporting period) has been paid off.

FOR Q. 1.2.4, the budgeted Wages expense would be $58,600 + $3200, since the Accrued Wages of $3200 isn't paid until the next reporting period, thus, you would include as well. I was told that the ending balances like Accrued Wages should be added on to Wages expense.

[_avO]

I don't see why you shouldn't deduct it, because if it stands that Wages are 58600 and Accrued Wages are 2400 in the Cash Flow Statement, that would mean the business paid a total of 61000 in this reporting period for Wages thus Wages Paid must only refer to the Wages incurred in this period.. very ambiguous wording -.-

[eeps]

LOL. the $2400 of Accrued Wages is inclusive of the $58,600 Wages Paid, I think. I assumed that $58,600 of Wages Paid was the TOTAL AMOUNT of which the business paid and in that was $2400 of Accrued. In theory, you'd have $2400 as Accrued Wages and $56,200 as Wages Paid in the Cash Flow Statement, right?.. I took it as, $58,600 as the TOTAL amount paid...

[_avO]

Yes, I also took it as 56,200 Wages and 2,400 Accrued, however in the solution provided, they stated that Wages was 58,600 and Accrued 2,400 in the CFS, thus making the operating activities a cash deficit, as opposed to a surplus !!

[_avO]

Yeah I just re-read Q1.2.5 Wages expense will include the wages incurred in the current Reporting period...
And in Q1.2.4, "Wages Paid" was 58,600 thus Accrued Wages is not inclusive in "Wages Paid" as it is not incurred in the current reporting period, according to Cambridge

[eeps]

LOL. ok. :S I'm lost...

I had $58,600 as Wages Paid and $2400 as Accrued Wages... I've got no idea if that's correct... SO wait... the $2400 of Accrued Wages from 31 December 2010, was paid on top off the $58,600 Wages Paid? (I've been doing like what the answer had for all the papers I've done thus far.)

[_avO]

Yeah it is paid on top of "Wages Paid", man so confusing, I've got to tell my teacher so she doesn't mark it wrong if it's on the SAC !