Study the Cash Flow Statement of this farming enterprise - NSC Agricultural Management Practices - Question 3 - 2021 - Paper 1

To calculate (b), we need the total income received as reported:

$ext{Total Received} = 31,978 + 3,600 + 5,000 = R 40,578$

Thus, (b) = R 40,578.

The net cash flow (c) is determined as follows:

$ext{Net Cash Flow} = ext{Total Received} - ext{Total Paid}$

Substituting the calculated values:

$c = 40,578 - 31,640 = R 8,938$

Thus, (c) = R 8,938.

The closing bank balance (d) can be found using the formula:

$ext{Closing Bank Balance} = ext{Opening Bank Balance} + ext{Net Cash Flow}$

Substituting in the known values:

$d = 52,000 + 8,938 = R 60,938$

Thus, (d) = R 60,938.

Several reasons could contribute to the discrepancies between the actual and budgeted values for transport:

1. Increase in Fuel Prices: This would lead to higher operational costs than planned.
2. Increase in Toll Fees: Increased toll costs could have an impact on transport expenses.
3. Wage Increases: If wages for drivers increased unexpectedly, this would elevate the total transport expenditure.
4. Increased Transportation Needs: A rise in the production or demand may require more transportation, thus inflating costs.

1. Financial Planning and Management: A cash flow statement aids businesses in planning their cash requirements and managing their financial resources effectively.
2. Monitoring Expenses: It helps in tracking and comparing actual expenses against the budgeted values, identifying variances and areas needing attention.