Question

Assignment Questions: 1. As a Chief Management Accountant of a Multi-National Company evaluate your primary duties and responsibilities and compare some of the differences between financial accounting and managerial accounting. (3 Marks) 2. At the beginning of the school year, Mohamed Ahamed decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31, 2018 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $8,810 Purchase season football tickets in September 120 Additional entertainment for each month 310 Pay fall semester tuition in September 4,800 Pay rent at the beginning of each month 430 Pay for food each month 240 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,090 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Sometimes an item may be a decrease in one period and an increase in a different period. Review the definitions of static budgets and flexible budgets. What weaknesses are shown by this cash budget? (3marks) b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? (1 marks) c. Mohamed can see that his present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be s at the end of December, with no time left to adjust. What are the budget implications for Mohamed Ahamed? (2 marks) 3. The following data are available in a manufacturing company for a yearly period: Particulars Fixed expenses: Wages and Salaries 9,50,000 Rent, Rate & Taxes 6,60,000

Answer 1

1. Some of the duties and responsibilites of management accountant
a. Preparing budgets, reports and financial statements
b. Undertaking financial, administration and internal audits.
c. Laising with manegerial staff and other colleagues
d. Supervising a team of accounting technician
e. Developing and managing financial systems and policies
The key difference between financial accounting and management accounting is that financial accounting is the preparation of financial reports for the analysis by the external users interested in knowing the financial position of the company, whereas, management accounting is the preparation of the financial as well as non financial information which helps managers in making policies and strategies of the comapny
2. a) Cash budget of Mohamed Ahmed
For the four months ending
	$	$	$	$
	Sep-18	Oct-18	Nov-18	Dec-18
Estimated cash receipts from
Part time job	1090	1090	1090	1090
Deposit				Aug-01
Total cash receipts	1090	1090	1090	1690
Less: Estimated cash payment for
Season football tickets	-120
Additional entertainment	-310	-310	-310	-310
Tuition	-4800
Rent	-430	-430	-430	-430
Food	-240	-240	-240	-240
Deposit	-600
Total cash payments	-6500	-980	-980	-980
Cash increase / (decrease)	-5410	110	110	710
Plus cash balance at beginning of the month	8810	3400	3510	3620
Cash balance at the end of the month	3400	3510	3620	4330
A budget that never changes is static budget, while a budget that changes based on actual activity is flexible budget.
This cash budget is considering fixed expenses and revenue over the period of four months.
b. This budget is static budget
c. As at 31 December, Mohammad requires $ 4800 to pay his tuition fees but as per this budget his cash balance at the end of December 2018 will be $ 4330. So shortfall in cash will be $ 470