Question:
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
|
1. 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.
1. Other Relevant Information:
1. 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.
2. 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.
3. An advance of Rs. 50,000 will be paid to a contractor for the construction of a building in September 2000.
4. Adequate overdraft facility may be arranged for, if needed.