Question

Cash balance of A Ltd., on 1st April is Rs 5,000. Estimated Credit Sales for the months are as follows: (15 Marks)
April: Rs 65,000, May: Rs 54,000, June: Rs 66,000, July:Rs 63,000 On 1st April, the uncollected credit sales amounts for February and March are Rs 13,500 and Rs 39, 150 respectively. Collection from the customers follow this pattern: 55% in the month of sale , 30% in the month following the sale , 13% in the second month following the sale and 2% as uncollectible (bad debts).
Materials purchases for March were Rs 10,000. Estimated purchases for the months are:April: Rs 12,500, May: Rs 16,500, June: Rs 13,000, July: Rs. 14,000. Purchases are usually paid by the 10th of the following the month of purchase.
Estimated cash expenditure: Rent Rs 21,000, Miscellaneous expenses Rs 20,000 each month.
Based on the above information provided, A Ltd., wants to know: (i) Expected cash collections during May
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(ii) Expected cash balance on 1st May
(iii) Expected cash balance on 31 May.
Prepare cash budget for the month April and May.

Answer 1

Answer:

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Explanation:

I am not able to answer the question