The Three Brothers Enterprise has the following balance sheet as at 30 June, 2019. Assets Cash Rs.

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Question:

The Three Brothers Enterprise has the following balance sheet as at 30 June, 2019.

Assets

Cash Rs. 280,000

Accounts Receivable 600,000

Less allowance for uncollectible 30,000 570,000

Inventory 525,000

Property, Plant & Equipment 1,500,000

Less accumulated depreciation 375,000 1,125,000

Total Rs. 2,500,000

Liabilities and equity

Accounts payable 1,650,000

Common Stock 1,200,000

Retained earnings (deficit) (350,000)

Total Rs. 2,500,000

Following information is available from the record:-

Sales for July and August are budgeted at Rs. 3,300,000 and Rs. 3,600,000 respectively.
Collections from sale are expected at 70% in the month of sale and 28% in the following month after sale. The balance 2% is uncollectible.
The company has a gross profit of 30% of sales as practiced in the past.
The purchases are 70% of the following month’s budgeted sales.
The payments of purchases are made in full in the next month of purchase.
The cash operating expenses are Rs. 465,000 each month which are paid in the same month.
Monthly depreciation is amounting to Rs. 150,000 which is exclusive of operating expenses.

Required

Prepare a budgeted cash collection schedule for July, 2019.
Prepare budgeted cash disbursement schedule for July 2019.
Prepare master cash budget for July 2019.
Prepare budgeted income statement for July, 2019.
Prepare budgeted balance sheet at the end of July ,2019.
Explain any special problems the company may face as visible from balance sheet. Recommend some suitable solution for the company to improve its financial condition.