CZD Ltd supply records, tapes and CDs to retail outlets. You are presented with the following financial information and are required to complete the cash budget for the three months ending 31 December 2005.
Opening cash 1/10/05 is £16,000. Creditors give one month's credit.
Salaries are paid in the same month as they are earned.
Other expenses are paid one month in arrears and include £2000 depreciation each month. Credit sales are settled 30% in the month of the sale and the remainder one month following the sale.
|
Month
|
Cash sales £
|
Credit sales £
|
Purchases £
|
Salaries £
|
Expenses £
|
|
September
|
25,000
|
40,000
|
70,000
|
6,000
|
7,000
|
|
October
|
28,000
|
45,000
|
68,000
|
6,000
|
7,000
|
|
November
|
28,000
|
40,000
|
59,000
|
6,000
|
7,000
|
|
December
|
30,000
|
38,000
|
60,000
|
6,000
|
7,000
|
(a) Prepare a cash budget for the months of October, November and December 2005.
(b) Prepare a schedule of outstanding debtors at the end of each of the months of October, November and December 2005.