Andy Gillespie supplies the following budgeted information relating to his business:

It is expected that:

■ The cash balance at 1 July will be £580 overdrawn
■ 30% of sales will be cash sales
■ 20% of purchases will be for cash

■ 50% of credit sale customers will pay in the month following sale and the remainder will pay the following month
■ Creditors will be paid two months after purchase
■ Wages will be paid in the month after they are incurred
■ Other expenses will be paid for as incurred.

Required

Prepare a cash budget for each of the three months ending 30 September.

Transcribed Image Text:

Sales Cash sale of old office machine Profit on sale of machine Purchases Cash purchase of new office machine Wages Other expenses Depreciation of office equipment May June July £ 34,000 35,000 34,000 35,000 37,000 150 50 16,000 5,600 5,500 4,570 4,700 250 250 August September £ 35,000 £ 40,000 16,500 17,000 19,000 15,000 1,800 5,600 5,500 3,950 4,780 265 265 5,600 5,400 265