The following forecasts relate to J. Takawiri Ltd. Forecast of revenue and costs for the quarter ending
Question:
The following forecasts relate to J. Takawiri Ltd.
Forecast of revenue and costs for the quarter ending 30th June 2021
April Sh. | May Sh. | June Sh. | |
Direct material purchases Wages Overheads: Production Administrative Selling and distribution Sales | 112,000 90,000 34,000 22,000 13,000 360,000 | 100,000 80,000 32,000 20,000 11,000 360,000 | 135,000 100,000 40,000 27,000 18,000 440,000 |
Forecast of revenue and costs for the quarter ending 30th September 2021
July Sh. | August Sh. | Sept. Sh. | |
Direct material purchases Wages Overheads: Production Administrative Selling and distribution Sales | 90,000 72,000 45,000 22,000 13,000 350,000 | 67,000 54,000 36,000 25,000 11,000 360,000 | 79,000 63,000 40,000 27,000 16,000 360,000 |
Additional information:
- The cash balance forecast on 1 July 2015 is Sh.90,000
- The period allowed by suppliers averages two months
- Debentures valued Sh.125,000 will be issued in the month of August 2021 and the amount will be received during the same month
- A new machine will be installed at the end of the month of June 2021 at a cost of Sh.150,000 and payment is promised in early August 2021
- Sales commission of 3% is payable within one month of sale
- A dividend of Sh.100,000 is to be paid in the month of September 2021
- There is a delay of one month in the payment of overheads and wages.
- 20% of the debtors pay in cash, and receive a cash discount of 4%. 70% of the debtors pay within one month and receive 2.5% cash discount. The other debtors pay within two months without a discount.
Required: A cash budget on monthly basis for the quarter ending 30th September 2021