Prepare monthly cash budget for 6 months beginning April 2020 1 Estimated sales Month Sales (Rs ) Jan20 100,000 Feb20 120,000 March20 140,000 April20 80,000 May20 60,000 June20 80,000 July20 100,000 Aug20 80,000 Sept20 60,000 Oct20 100,000 2 80 sales are credit, 20 cash 75 of credit sales are colle...

Answer April May June July August September Beginning cash balance 20000 20000 20000 20000 20000 200 ...

Prepare monthly cash budget for 6 months beginning April 2020. 1. Estimated sales Month Sales (Rs.) Jan20

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Question:

Prepare monthly cash budget for 6 months beginning April 2020.

1. Estimated sales

Month	Sales (Rs.)
Jan’20	100,000
Feb’20	120,000
March’20	140,000
April’20	80,000
May’20	60,000
June’20	80,000
July’20	100,000
Aug’20	80,000
Sept’20	60,000
Oct’20	100,000

2. 80% sales are credit, 20% cash. 75% of credit sales are collected in one month, balance in 2 months. There are no bad debts.

3. Wages and salaries are payable as follows: 9000, 8000, 10000, 10000, 9000, 9000 respectively from April – Sept.

4. Firm has taken loan of Rs. 120,000. Interest @ 10% to be paid quarterly in Jan / April etc.

5. Tax of s. 5000 Rs. be paid in July

6. Cash balance on 1^st April is Rs. 20,000 which is minimum required balance. Any surplus / deficit is made up by temporary investment / liquidation of temporary investment or temporary borrowings at the end of each month (ignore interest).