Question: 2 ( 5 marks )

Expected sales for the next (5) months (February - Jun,2016) in CNN company is as the following: ( by Units )

Feb March April May June

20000 U. 22000 U. 25000 U. 28000 U. 30000 U.

Expected sale price per a unit is OMR 4 for the first (3) months and expected to increase by 10 % for the next (3) months. Sales policy is to receive 30% of the sales in cash at the same month of sale, 40 % in the next month, and the rest in the third month.

Purchases cost is expected to be 60 % of each month sales and is paid completely a month after the purchases.

Other cash incomes:

Rent to be received OMR 3,000 in May and OMR 5000 in July

Loan is expected to be borrowed in May OMR10000.

Interest is to be received OMR 4,000 on May and OMR 4000 in July

Other expenses:

Wages 25 % of each month sale and is paid in the same month.

Rent OMR12,000 paid on March and OMR 10,000 on June

Taxes OMR 5000 to be paid in two equal parts in May and July.

Other Miscellaneous OMR 5000 is paid monthly

Opening balance: for April is OMR12,000.

Instructions:

1-Prepare the Cash Budget for the second quarter of 2016(April-June)?