Prepare a cash budget for Jan,

Q No 5 The opening cash balance on 1st Jan was expected to be Rs. 30,000. The sales budget was as follows:

November Rs. 80,000

December       90,000

January      75,000

February       75000

March       80000


Analysis of records shows that debtors settle according to the following pattern: 60% within the month of sales, 25% the month following, 15% the month following.


Extracts from the purchases budget were as follows:

December Rs.60000

January      55000

February      45000

March      55000

All purchases are on credit and experience shows that 90% are settled in the month of purchases and the balance settled the month after.

Wages are Rs.15000 per month and overheads of Rs.20,000 per month (including Rs.5000 depreciation) are settled monthly.

Taxation of Rs.8000 must be settled in February and the company will receive a settlement of an insurance claim of Rs.25000 in March.


Required: Prepare a cash budget for Jan, Feb, and March

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