Dave is planning to start up in business selling ice cream from a van around his local neighbourhood from April to September. He wants to open a business bank account, but the bank manager has insisted that he provides a cash budget together with a budgeted statement of profit or loss for his first six months of trading and a budgeted statement of financial position at 30 September. Dave is unsure how to put this information together, but he has provided you with the following details of his planned income and expenditure:

• Dave will pay in £5,000 of his own money on 1 April to get the business started.

• He expects to make all his sales for cash and anticipates that he will make sales of £3,500 in April, £5,500 in May, £7,500 in each of the next three months and £2,500 in September.

• He will buy his ice cream from a local supplier and expects the cost of this to be 50% of selling price. Dave has agreed with his supplier that he will start paying for his ice cream in May rather than in the month of purchase.

• Dave intends to sell all his ice cream by the end of September and to have no inventory at the end of this trading period.

• Ice cream vans can be hired at a cost of £1,500 for three months. The £1,500 hire charge is payable at the start of each three-month period.

• Van running costs are estimated to be £250 per month payable in cash each month.

• Business insurance payable on 1 April will cost £500 for six months.

• Dave will draw £1,000 per month out of the business bank account to meet personal expenses.

Required

Provide Dave with:

• A cash budget for his first six months of trading.

• A budgeted statement of profit or loss for his first six months of trading.

• A budgeted statement of financial position at 30 September.