The following forecasts relate to J. Takawiri Ltd.

Forecast of revenue and costs for the quarter ending 30^th June 2021

April Sh.	May Sh.	June Sh.
Direct material purchases Wages Overheads: Production Administrative Selling and distribution Sales	112,000 90,000 34,000 22,000 13,000 360,000	100,000 80,000 32,000 20,000 11,000 360,000	135,000 100,000 40,000 27,000 18,000 440,000

Forecast of revenue and costs for the quarter ending 30^th September 2021

July Sh.	August Sh.	Sept. Sh.
Direct material purchases Wages Overheads: Production Administrative Selling and distribution Sales	90,000 72,000 45,000 22,000 13,000 350,000	67,000 54,000 36,000 25,000 11,000 360,000	79,000 63,000 40,000 27,000 16,000 360,000

Additional information:

1. The cash balance forecast on 1 July 2015 is Sh.90,000
2. The period allowed by suppliers averages two months
3. Debentures valued Sh.125,000 will be issued in the month of August 2021 and the amount will be received during the same month
4. A new machine will be installed at the end of the month of June 2021 at a cost of Sh.150,000 and payment is promised in early August 2021
5. Sales commission of 3% is payable within one month of sale
6. A dividend of Sh.100,000 is to be paid in the month of September 2021
7. There is a delay of one month in the payment of overheads and wages.
8. 20% of the debtors pay in cash, and receive a cash discount of 4%. 70% of the debtors pay within one month and receive 2.5% cash discount. The other debtors pay within two months without a discount.

Required: A cash budget on monthly basis for the quarter ending 30^th September 2021

Answer rating: 100% (QA)

Answer Particulars July August September Total Cash receipts Receipts from debtors 403500 351995 349... View the full answer