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  • 1 Marks

QTB – Nov 2014 – L1 – SA – Q18 – Mathematics of Business Finance

Identifies the correct definition of an annuity.

An annuity is defined as the:
A. Specific amount of money saved at regular intervals meant to be used in funding some future financial commitments
B. Lump sum investment designed to produce a sequence of equal regular payments over time
C. Specific amount of money received at intervals which is not necessarily equal to fund some future financial commitments
D. Lump sum investment designed to produce a sequence of unequal but regular payments over time
E. Repayment of interest-bearing debts through a series of equal regular payments until the debt is entirely paid off with the accrued interest

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  • 1 Marks

MI – May 2018 – L1 – SA – Q11 – Costing Methods

Basis for requesting progress payments in contracts.

What is the basis for requesting for progress payments on an on-going contract?
A. Contractor’s invoice
B. Architect’s certificate
C. Bill of quantities
D. Inspection report
E. Certificate of Occupancy

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q13 – Accounting Concepts

This question requires calculating the amount of cash paid out during a period.

In a cash book, the opening balance was N70,600, closing balance was N86,600 and the total cash received during the period was N180,000. What was the amount of cash paid out during the period?
A. N89,000
B. N98,000
C. N146,000
D. N164,000
E. N186,000

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  • 20 Marks

MI – May 2015 – L1 – SB – Q1 – Budgeting

Prepare a cash budget for a three-month period based on sales, purchases, loan, and other projections.

WHYME LIMITED is engaged in the manufacturing and sales of fast-moving consumer products. The following data are projections for a period of six months:

Month Sales (N’000) Purchases (N’000) Salaries (N’000) Staff Salary Deductions (N’000) Overheads (N’000)
Jan 9,600 5,400 1,650 78 1,650
Feb 15,800 12,000 1,760 82 1,920
March 16,000 10,000 1,760 90 2,100
April 17,600 11,000 1,789 89 2,400
May 14,800 11,200 1,842 92 1,860
June 14,200 9,800 1,800 85 1,720

Other additional information:

  1. Sales are 25% on cash basis, 55% is collected in the month following sales, and the balance in the third month.
  2. All purchases are on 30 days credit while 20% of overheads are paid in the same month, with the balance in the following month.
  3. Net salaries will be paid in the same month, while statutory deductions are remitted on the 10th day of the following month.
  4. A N10 million loan will be released in March to finance the purchase of a new asset costing N12 million in the same month. The loan will be repaid equally over four months starting from April. (Ignore interest).
  5. An old asset will be disposed of in April for N1.5 million.
  6. Cash balance as at the end of February will be N6.5 million, with N2.5 million put into a short-term investment in March at a 2% monthly interest rate, credited at the beginning of the following month.

Required:
Prepare a cash budget for the period of March to May. (Ignore taxation).
(20 Marks)

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  • 10 Marks

MA – Nov 2021 – L2 – Q3b – Cash Budgets and Master Budgets

Extract the cash budget for the second quarter showing the cash balance for each month.

b) The budgeted Income Statement for Zeedan Company for the year 2020 is presented below.

Description GH¢
Sales revenue 930,000
Cost of sales 558,000
Gross profit 372,000
Total expenses 225,000
Net profit 147,000

Notes:
i) Monthly sales in each quarter are the same. The sales for January are GH¢50,000 and this will remain unchanged up to March when it will increase by GH¢20,000 from April and remain unchanged for the remaining two months in the quarter. Third quarter monthly sales will be GH¢90,000 each while those of the fourth quarter are GH¢100,000 each.
ii) 20% of all sales are on a cash basis, 40% of the monthly sales are paid in the month after sales, and the balance is paid the second month after sales. No bad debt is expected.
iii) The monthly cost of sales represents 60% of the current month’s sales. Inventory is kept at 60% of the following month’s cost of sales. All purchases are paid in full after one month.
iv) Included in the expenses is a depreciation of GH¢87,000. The monthly expenses paid as and when incurred are GH¢10,000. This is fixed in January but increased by 20% effective April.

Required:
Extract the Cash Budget for the second quarter of the year, showing the cash balance for each month in the quarter.

(10 marks)

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  • 10 Marks

PSAF – July 2023 – L2 – Q5a – Public sector fiscal planning and budgeting

Prepare a Cash Flow Forecast for Tham District Assembly for the first quarter of 2022.

The following transactions relate to Tham District Assembly (TDA):

i) The estimated internally generated funds of the Assembly for the fourth quarter of 2021 and the first quarter of 2022 are given below:

Source of Revenue Oct 2021 (GH¢’000) Nov 2021 (GH¢’000) Dec 2021 (GH¢’000) Jan 2022 (GH¢’000) Feb 2022 (GH¢’000) Mar 2022 (GH¢’000)
Fees and Charges 300,000 320,000 310,000 400,000 450,000 420,000
Licenses 120,000 120,000 200,000 180,000 140,000 160,000
Property rate 800,000 1,200,000 1,000,000 900,000 900,000 1,300,000
Fines and Penalties 50,000 50,000 40,000 60,000 80,000 80,000

ii) The revenue policy of the Assembly is as follows:

  • Fees and Charges: 100% of Fees and Charges are expected to be collected in the month of estimation.
  • Licenses: Licenses are collected in the month following the month of estimation.
  • Property Rate: Property rates are collected in the third month after the month of estimation.
  • Fines and Penalties: Fines and Penalties are collected on the spot.

iii) Experience shows that about 10% of the amount owed in respect to property rate is never received.

iv) Decentralised transfer is estimated at GH¢2,000,000 and GH¢1,800,000 for the first and second quarters of 2022 respectively. The decentralised transfers are often released in the second month of each quarter, except for the first quarter, which is released in the last month.

v) Goods and services are paid two months in arrears. The projected expenses in the Assembly’s 2021 and 2022 budgets are as follows:

Oct 2021 (GH¢’000) Nov 2021 (GH¢’000) Dec 2021 (GH¢’000) Jan 2022 (GH¢’000) Feb 2022 (GH¢’000) Mar 2022 (GH¢’000)
365,000 280,000 280,000 290,000 200,000 320,000

vi) The Assembly budgets to acquire equipment and furniture amounting to GH¢300,000,000 in the month of February 2022. It has planned that 50% of the amount will be paid in the month of purchase, and the balance paid equally over the following two months. The equipment and furniture will be depreciated at the rate of 10% per annum.

vii) The cash and cash equivalent balance at the end of the 2021 financial year was GH¢63,000.

Required:
Prepare a Cash Flow Forecast for the first quarter of 2022, showing clearly the forecast for each month and the quarter as a whole. (10 marks)

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  • 1 Marks

QTB – Nov 2014 – L1 – SA – Q18 – Mathematics of Business Finance

Identifies the correct definition of an annuity.

An annuity is defined as the:
A. Specific amount of money saved at regular intervals meant to be used in funding some future financial commitments
B. Lump sum investment designed to produce a sequence of equal regular payments over time
C. Specific amount of money received at intervals which is not necessarily equal to fund some future financial commitments
D. Lump sum investment designed to produce a sequence of unequal but regular payments over time
E. Repayment of interest-bearing debts through a series of equal regular payments until the debt is entirely paid off with the accrued interest

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  • 1 Marks

MI – May 2018 – L1 – SA – Q11 – Costing Methods

Basis for requesting progress payments in contracts.

What is the basis for requesting for progress payments on an on-going contract?
A. Contractor’s invoice
B. Architect’s certificate
C. Bill of quantities
D. Inspection report
E. Certificate of Occupancy

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  • 1 Marks

FA – Nov 2021 – L1 – SA – Q13 – Accounting Concepts

This question requires calculating the amount of cash paid out during a period.

In a cash book, the opening balance was N70,600, closing balance was N86,600 and the total cash received during the period was N180,000. What was the amount of cash paid out during the period?
A. N89,000
B. N98,000
C. N146,000
D. N164,000
E. N186,000

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  • 20 Marks

MI – May 2015 – L1 – SB – Q1 – Budgeting

Prepare a cash budget for a three-month period based on sales, purchases, loan, and other projections.

WHYME LIMITED is engaged in the manufacturing and sales of fast-moving consumer products. The following data are projections for a period of six months:

Month Sales (N’000) Purchases (N’000) Salaries (N’000) Staff Salary Deductions (N’000) Overheads (N’000)
Jan 9,600 5,400 1,650 78 1,650
Feb 15,800 12,000 1,760 82 1,920
March 16,000 10,000 1,760 90 2,100
April 17,600 11,000 1,789 89 2,400
May 14,800 11,200 1,842 92 1,860
June 14,200 9,800 1,800 85 1,720

Other additional information:

  1. Sales are 25% on cash basis, 55% is collected in the month following sales, and the balance in the third month.
  2. All purchases are on 30 days credit while 20% of overheads are paid in the same month, with the balance in the following month.
  3. Net salaries will be paid in the same month, while statutory deductions are remitted on the 10th day of the following month.
  4. A N10 million loan will be released in March to finance the purchase of a new asset costing N12 million in the same month. The loan will be repaid equally over four months starting from April. (Ignore interest).
  5. An old asset will be disposed of in April for N1.5 million.
  6. Cash balance as at the end of February will be N6.5 million, with N2.5 million put into a short-term investment in March at a 2% monthly interest rate, credited at the beginning of the following month.

Required:
Prepare a cash budget for the period of March to May. (Ignore taxation).
(20 Marks)

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  • 10 Marks

MA – Nov 2021 – L2 – Q3b – Cash Budgets and Master Budgets

Extract the cash budget for the second quarter showing the cash balance for each month.

b) The budgeted Income Statement for Zeedan Company for the year 2020 is presented below.

Description GH¢
Sales revenue 930,000
Cost of sales 558,000
Gross profit 372,000
Total expenses 225,000
Net profit 147,000

Notes:
i) Monthly sales in each quarter are the same. The sales for January are GH¢50,000 and this will remain unchanged up to March when it will increase by GH¢20,000 from April and remain unchanged for the remaining two months in the quarter. Third quarter monthly sales will be GH¢90,000 each while those of the fourth quarter are GH¢100,000 each.
ii) 20% of all sales are on a cash basis, 40% of the monthly sales are paid in the month after sales, and the balance is paid the second month after sales. No bad debt is expected.
iii) The monthly cost of sales represents 60% of the current month’s sales. Inventory is kept at 60% of the following month’s cost of sales. All purchases are paid in full after one month.
iv) Included in the expenses is a depreciation of GH¢87,000. The monthly expenses paid as and when incurred are GH¢10,000. This is fixed in January but increased by 20% effective April.

Required:
Extract the Cash Budget for the second quarter of the year, showing the cash balance for each month in the quarter.

(10 marks)

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  • 10 Marks

PSAF – July 2023 – L2 – Q5a – Public sector fiscal planning and budgeting

Prepare a Cash Flow Forecast for Tham District Assembly for the first quarter of 2022.

The following transactions relate to Tham District Assembly (TDA):

i) The estimated internally generated funds of the Assembly for the fourth quarter of 2021 and the first quarter of 2022 are given below:

Source of Revenue Oct 2021 (GH¢’000) Nov 2021 (GH¢’000) Dec 2021 (GH¢’000) Jan 2022 (GH¢’000) Feb 2022 (GH¢’000) Mar 2022 (GH¢’000)
Fees and Charges 300,000 320,000 310,000 400,000 450,000 420,000
Licenses 120,000 120,000 200,000 180,000 140,000 160,000
Property rate 800,000 1,200,000 1,000,000 900,000 900,000 1,300,000
Fines and Penalties 50,000 50,000 40,000 60,000 80,000 80,000

ii) The revenue policy of the Assembly is as follows:

  • Fees and Charges: 100% of Fees and Charges are expected to be collected in the month of estimation.
  • Licenses: Licenses are collected in the month following the month of estimation.
  • Property Rate: Property rates are collected in the third month after the month of estimation.
  • Fines and Penalties: Fines and Penalties are collected on the spot.

iii) Experience shows that about 10% of the amount owed in respect to property rate is never received.

iv) Decentralised transfer is estimated at GH¢2,000,000 and GH¢1,800,000 for the first and second quarters of 2022 respectively. The decentralised transfers are often released in the second month of each quarter, except for the first quarter, which is released in the last month.

v) Goods and services are paid two months in arrears. The projected expenses in the Assembly’s 2021 and 2022 budgets are as follows:

Oct 2021 (GH¢’000) Nov 2021 (GH¢’000) Dec 2021 (GH¢’000) Jan 2022 (GH¢’000) Feb 2022 (GH¢’000) Mar 2022 (GH¢’000)
365,000 280,000 280,000 290,000 200,000 320,000

vi) The Assembly budgets to acquire equipment and furniture amounting to GH¢300,000,000 in the month of February 2022. It has planned that 50% of the amount will be paid in the month of purchase, and the balance paid equally over the following two months. The equipment and furniture will be depreciated at the rate of 10% per annum.

vii) The cash and cash equivalent balance at the end of the 2021 financial year was GH¢63,000.

Required:
Prepare a Cash Flow Forecast for the first quarter of 2022, showing clearly the forecast for each month and the quarter as a whole. (10 marks)

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