Unit 7 P4

In this assignment, I will be using the budgetary techniques to prepare budgets for two selected organisations. The two organisations are: Mike Anderson (Art Supplies) and Strudwick Stationers LTD
Mike Anderson (Art Supplies)
Above is the cash budget for Mike Anderson. At the end of the June, they had -£7,100 left to start trading for July.
A cash budget is a diagram which shows the inflows and outflows of a business during a specific timeline. It shows whether a business has sufficient cash to be able and to its regular operations.
In the Receipts section it shows the inflows of the business Arts and Crafts. Mike invested £20,000 in the beginning of his business. In this section it also includes the sales coming into the business which is recorded two months after the actual sales due to Mike allowing customers two months credit to customers.
Payment section include the expenses of a business such as purchases, stock, running expenses, drawings and more. In the beginning of the business Mike had assets of £8,000 and stock totalling to £5,000.
In the third last section it includes the business’s monthly opening balance, the cash flow throughout the whole business months and the closing business. During the beginning of the business the opening balance was 0. The business continued to have a low cash flow income leading the business to have a closing balance of £-19,100.

The above is the trading profit and loss statement for Mike Anderson. They had a net profit of -£19,100. The reason why the costs have been split is because the relevant departments within the business can see what their expenses are and can use this to manage their costing. This also helps in pricing the products and the cost of products produced. To get a net profit, the management department can change how frequent the directors take money out of the business and how much money can be put in to the business
Capital 40,000
Cash 25,500
Total Receipts 65,500...