ABC Ltd., wishes to arrange overdraft facilities with its bankers during the period April to June 2007. When it will be manufacturing mostly for stock. Prepare a cash budget for the above period from the following data, indicating the extent of the bank facilities the company will require at the end of each month. (a) Credits Sales (Rs.) Purchase (Rs.) Wages(Rs.) Feb 2007 180000 124800 12000 Mar 192000 144000 14000 Apr 10800 243000 1000 May 174000 246000 1000 June 126000 268000 15000 (b) 50% of credit sales are realize in the month of following the sales and the reaming 50% in the second month following creditors are paid in the month following the month of purchase. (c) Cash at bank on 1.4.2007 (estimated) Rs. 25000.
Answers
Cash budget for 2007
Particulars April May June
(a) Receipts 25,000 53,000 (51,000)
Opening balance 90,000 96,000 54,000
Sales 96,000 54,000 87,000
Total receipts (a) 2,11,000 2,03,000 90,000
(b) Payments
Purchases 1,44,000 2,43,000 90,000
Wages 14,000 11,000 10,000
Total Payments (b) 1,58,000 2,54,000 2,56,000
Closing balance (a-b) 53,000 (51,000) (1,66,000)
Explanation:
this is answer a) 211000,203000,90000
