Prepare a Cash Budget for 3 months ending on 30 September 2000 from the following information:
|
Month |
Sales Rs. |
Materials Rs. |
Wages Rs. |
Overheads RS. |
|
May |
56,000 |
19,200 |
6,000 |
3,400 |
|
June |
60,000 |
18,000 |
6,000 |
3,800 |
|
July |
64,000 |
18,400 |
6,400 |
4,000 |
|
August |
68,000 |
20,000 |
7,200 |
4,400 |
|
September |
72,000 |
20,800 |
8,000 |
4,600 |
- Credit Terms are:
Sales/Debtors: 10% sales are on cash. 50% of the Credit Sales are collected in the next month and the balance in the following month.
Creditors: Raw Materials – 1 month; Wages – 1/2 month; Overheads – 1/4 month.
- Other Relevant Information:
- Rent from a godown let out on 1 January 1999 at a yearly contract of Rs. 2,25,000 with a condition of 12% increase in each year is receivable in equal instalments in each month.
- Interest @ 15% p.a. on an amount of Rs. 2,00,000 borrowed on 1 January 1998 is to be paid each month starting from 1 March 2000. Interest for the period from 1 January 1998 to 29 February 2000 is to be paid in 10 equal monthly instalments starting from 1 July 2000. Interest for the month of April 2000 remains unpaid. This unpaid amount is to be paid in the month of September 2000 with a penal interest of Rs. 100.
- An advance of Rs. 50,000 will be paid to a contractor for the construction of a building in September 2000.
- Adequate overdraft facility may be arranged for, if needed.