Question: Prepare a Cash Budget from the data given below for a period of six months (July to December) (1) Month Sales (OMR) Raw Materials(OMR) May

Prepare a Cash Budget from the data given below for a period of six months (July to December)

(1) Month Sales (OMR) Raw Materials(OMR)

May 75,000 37,500

June 75,000 37,500

July 1,50,000 52,500

August 2,25,000 3,67,500

September 3,00,000 1,27,500

October 1,50,000 97,500

November 1,50,000 67,500

December 1,37,500 ____

(2) Collection estimates:

  • Within the month of sale: 5%
  • During the month following the sale: 80%
  • During the second month following the sale: 15%

(3) Payment for raw materials is made in the next month.

(4) Salary OMR 11,250, Lease payment OMR 3750, Misc. Exp. OMR 1150, are paid each month

(5) Income tax OMR 26,250 each in September and December.

(6) Payment for research in October OMR 75,000

(7) Opening Balance on 1st July OMR 55,000

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