Q. 1 Based on the following forecasts prepare a Cash Budget for the period Jan - April
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Q. 1
Based on the following forecasts prepare a Cash Budget for the period Jan - April 2014:- Sales:
- Nov 16L | Dec 20L | Jan 20L | Feb 18L | Mar 24L | Apr 20L
- 20% Cash Sales, rest on credit - half of which is collected in next month & remaining in 2nd month
- Sales Commissions @5% paid in month next to sale on Credit Sales
- Purchases:
- Dec 8L | Jan - 12L | Feb - 12L | Mar - 10L | Apr - 14L
- Labour: month lag (50% paid in the current month, balance in next)
- Dec 2L | Jan -2L | Feb - 3L | Mar - 3L | Apr - 2L
- Overheads:
- Dec 1L | Jan - 1.5L | Feb - 1.2L | Mar - 1.8L | Apr - 1L
- Machinery Purchase:
- Jan - 12L; 20% Downpayment, 40% next month, 40% in next to next month
- Advance payment of Tax: Jan - 2L | Mar - 3L
- Company has a policy to maintain a minimum balance of Rs.1L. Excess or Shortage will be Invested or Borrowed. Ignore the interest.
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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