Problem $1$

The following data relate to Bookshop Ltd:

The financial manager has made the following sales forecasts

for the first five months of the coming year, commencing from $1$ April $2012$:

Month Sales$($$$)$

April $40,000$

May $45,000$

June $,55,000$

July $60,000$

Auqust $,50,000$

Other data:

$($i$)$ Debtors' and creditors' balance at the beginning of the year are $$30,000$ and $$14,000,$ The

balance of other relevant assets and liabilities are:

$($ii$)40\%$ sales are on cash basis. Credit sales are collected in the month following the sale.

$($iii$)$ Cost of sales in $60$ per cent on sales.

$($iv$)$ The only other variable cost is a $5\%$ commission to sales agents. The Sales Commission is paid in

a month after it is earned. respectively

$($iv$)$ Inventory $($stock$)$ is kept equal to sales requirements for the next two month budgeted sales

$($v$)$ Trade creditors are paid in the following month after purchases.

$($vii$)$ Fixed costs are $$5,000$ per month including $$2,000$ depreciation.

You are required to prepare a cash budget for the months of April, May and June $2012,$ respectively.