A newly started company wishes to prepare Cash Budget from January 2008. Prepare a Cash Budget for the first six months from the following estimated receipts and expenditures.
|
Month |
Total Sales |
Materials |
Wages |
Production |
Selling & |
|
January |
20,000 |
20,000 |
4,000 |
3,200 |
800 |
|
February |
22,000 |
14,000 |
4,400 |
3,300 |
900 |
|
March |
24,000 |
14,000 |
4,600 |
3,300 |
800 |
|
April |
26,000 |
12,000 |
4,600 |
3,400 |
900 |
|
May |
28,000 |
12,000 |
4,800 |
3,500 |
900 |
|
June |
30,000 |
16,000 |
4,800 |
3,600 |
1,000 |
Cash balance on 1st January was Rs.10, 000. A new machine is to be installed at Rs.30, 000 on credit to be repaid by two equal installments in March and April. Sales commission @ 5% on total sales is to be paid within the month following actual sales. Rs.10, 000 being the amount of 2nd call on shares may be received in March. Share premium amounting to Rs.2, 000 is also receivable with 2nd call. Credit allowed by suppliers is 2 months, credit allowed to customers is 1 month, delay in payment of overheads is 1 month, and delay in payment in wages is ½ month.
Assume cash sales to be 50% of total sales.