Tan Dan Ltd is planning to purchase a fixed asset costing $150 000 in total.The planned delivery date is 1 December 2013 with settlement on that date.A deposit of $20 000 is to be paid on 1 July 2012.The amount that will appear in the cash budget for December 2013 is:

Question

Quizplus · Accepted Answer

The fixed asset will cost $150 000 in total, but a deposit of $20 000 was already paid on 1 July 2012. Therefore, the remaining amount to be paid in December 2013 will be $130 000, resulting in a cash outflow of $130 000.

Tan Dan Ltd Is Planning to Purchase a Fixed Asset