Tommy Chan supplies the following budgeted information relating to his business:

It is expected that:

■ The cash balance at 1 October will be £670
■ 10% of all sales will be on credit
■ 10% of purchases will be for cash
■ Debtors will settle their debts in the month following sale
■ Creditors will be paid two months after purchase
■ Rent is payable monthly in advance
■ Wages and other expenses will be paid as incurred.

Required

Prepare a cash budget for each of the three months ending 31 December.

Transcribed Image Text:

Sales Purchases Wages Rent Other expenses Depreciation of office equipment August September October November December £ £ £ £ 24,000 29,000 34,000 43,000 13,000 15,000 24,000 35,000 4,500 4,500 6,000 6,500 200 200 225 225 1,600 450 £ 23,000 12,000 4,500 200 1,750 450 1,850 450 3,400 450 980 450