From the following information you are to prepare a Cash Budget for the period from July to December 2008.

From the following information you are to prepare a Cash Budget for the period from July to December 2008.

i) The estimated sales and expenses are as follows:

ii) Sales are 20% in cash and balance on credit. 50% of the debtors are collected in the month of sales and the remaining in the next month.

iii) The time lag in payment of purchases and expenses is 1 month. However, wages and salaries are paid fortnightly with a time lag of 15 days.

iv) The company maintains a minima cash balance of Rs. 5,000. The cash balance in excess of Rs. 7,000 is invested in government securities in multiples of Rs. 1,000. Short falls in cash balance are made good by borrowing from banks. The interest received as well as paid is to be ignored.

					Cash Budget
Particular				July	Aug		Sep			Oct		Nov		Dec
Recipts:-
1) cash sales				8,000	8,000		10,000			10,000		12,000		13,000
2) Collection				16,000	16,000		20,000			20,000		24,000		26,000
50% in the same month
3) collection Debtor				0	16,000		16,000			20,000		20,000		24,000
in the following month
4) Intt Recd				0	0		2,000			0		0		0
5) Sales of fixed
Accents				0	20,000		0			0		0		0
Payment:-
1) Purchases			14,000			16,000		17,000	20,000		20,000		25,000
2) Expenses			5,000			6,000		6,000	6,000		7,000		7,000
3) wages and
Salaries			7,000			7,000		9,000	9,000		10,000		11,000
			6,000			7,000		7,000	9,000		9,000		10,000
			32,000			36,000		39,000	44,000		46,000		53,000
Balance
Cash			5,000			5,000		5,000	5,000		5,000		5,000
Deficit/surplus			13,000			19,000		4,000	1,000		5,000		5,000
			(borrowed)			(invested)
Closing Cash			18,000			24,000		9,000	9,000		10,000		10,000

CASH BUDGET

CASH BUDGET

	APRIL	MAY	JUNE	JULY	AUG	SEPT	OCT
RECEIPTS
OPENING BALANCE	20,500	18,300	44,380	11,400	10,000	54,600	70,150
CASH SALES	16,000	10,400	10,000	15,000	18,000	7,000	5,000
COLLECTION FROM DEBTORS IN ONE MONTH	17,500	56,000	36,400	35,000	52,500	63,000	24,500
COLLECTOR FROM DEBTORS IN TWO MONTHS	6,000	2,500	8,000	5,200	5,000	7,500	9,000
BANK LOAN	0	0	0	12,650	0	0	0
TOTAL	60,000	87,200	98,780	79,250	85,500	132,100	108,650
PAYMENTS
INVESTMENT IN SECURITIES	0	3,300	29,380	0	0	39,600	55,150
RENT	1,000	1,000	1,000	1,000	1,000	1,000	1,000
MISE EXPN.	500	500	500	500	500	500	500
COMMISSION	800	520	500	750	900	350	250
SALARY	3,000	2,500	3,500	4,000	4,000	3,000	3,000
PAYMENT TO CREDITORS	36,400	35,000	52,500	63,000	24,500	17,500	0
TOTAL	41,700	42,820	87,380	69,250	30,900	61,950	59,900
CLOSING BALANCE	18,300	44,380	11,400	10,000	54,600	70,150	48,750