1. Chapter 4 Cash budgets Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

2. Cash budgets
Cash receipts budget: Estimated receipt of cash from all sources.
Cash payments budget: All estimated payments of cash by the business.
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

3. 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.
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

4. Sample cash receipts budget where all receipts are GST-free or input taxed
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

5. Sample cash payments budget where some acquisitions include GST (p. 61)
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

6. 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
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

7. 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.
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

8. Dermott Jewellers (p. 69)
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

9. 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.
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

10. Collection from debtors with discount allowed and doubtful debts (p
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld

11. 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.
Copyright  2003 McGraw-Hill Australia Pty Ltd
PPTs t/a Budgeting, second edition, by Banks & Giliberti
Slides prepared by Mya Aronfeld