tailieunhanh - Lecture Budgeting - Chapter 4: Cash budgets

Cash budget is an estimation of the cash inflows and outflows for a business or individual for a specific period of time. Cash budgets are often used to assess whether the entity has sufficient cash to fulfill regular operations and/or whether too much cash is being left in unproductive capacities. In this chapter you will understand what is cash receipts budget and cash payments budget. | Chapter 4 Cash budgets 4- Cash budgets Cash receipts budget: Estimated receipt of cash from all sources. Cash payments budget: All estimated payments of cash by the business. 4- GST and cash budgets This unit assumes all businesses are registered for GST and pay their liability monthly. Collection of Goods & Services Tax (GST) when the business makes a taxable supply. Taxable supply: a sale of a good or service that is not GST-free or input taxed. GST input tax credits: a credit for the GST included in the purchase of a good or service. 4- Sample cash receipts budget where all receipts are GST-free or input taxed 4- Sample cash payments budget where some acquisitions include GST (p. 61) 4- Cash budget format Cash balance @start add cash receipts add GST refund total cash available for needs cash payments add GST payable total payments Cash balance @end 4- Collections from debtors Calculate cash and credit sales (p. 65). work out cash sales GST exclusive work | Chapter 4 Cash budgets 4- Cash budgets Cash receipts budget: Estimated receipt of cash from all sources. Cash payments budget: All estimated payments of cash by the business. 4- GST and cash budgets This unit assumes all businesses are registered for GST and pay their liability monthly. Collection of Goods & Services Tax (GST) when the business makes a taxable supply. Taxable supply: a sale of a good or service that is not GST-free or input taxed. GST input tax credits: a credit for the GST included in the purchase of a good or service. 4- Sample cash receipts budget where all receipts are GST-free or input taxed 4- Sample cash payments budget where some acquisitions include GST (p. 61) 4- Cash budget format Cash balance @start add cash receipts add GST refund total cash available for needs cash payments add GST payable total payments Cash balance @end 4- Collections from debtors Calculate cash and credit sales (p. 65). work out cash sales GST exclusive work out GST payable on cash sales work out credit sales GST inclusive Prepare a collection from debtors schedule for the budget period. Show separately at bottom of schedule the GST payable included in the figures. 4- Dermott Jewellers (p. 69) 4- GST reported on accrual basis GST is payable at point of sale. Input tax credit is receivable when the entity receives the tax invoice. GST adjustment for a bad debt is made when the debt is actually written off as bad. GST adjustment for discount allowed is made when discount is given. GST collected each month is not the same as GST payable. 4- Collection from debtors with discount allowed and doubtful debts (p. 71) 4- Desired balance and financial requirements Management may desire to have a minimum cash balance. May involve borrowing funds to attain required balance. Borrowings are made in the month that a deficit is likely. There may be conditions attached to the amounts that can be borrowed. 4-