Question

Classify the budgets on the basis of time functions and flexibility.
OR
SK Ltd. wishes to arrange overdraft limits with its bankers for the three months period from July to
September, 2014. The various forecasts are as follows.
Months
May
June
July
August
September
Sales
18.000
19,000
11,000
18,000
12,000
Purchases
12,500
14,500
24,000
25,000
27,000
Expenses
1200
1400
1100
1000
1500
Additional Information:
1) Cash Balance on 1st July 2014 was 2500.
ii) 50% of the sales are realised in the month following the sale and the remaining 50% in the second
month following
111) Suppliers will be paid in cash in the month of purchases.
iv) All the sale are made on credit basis.
On the basis of the above informations, prepare a cash budget for the quarter ending September 30, 2014
and indicate the limits of bank overdraft which the company will require at the end of each month?​

Answer 1

Answer:

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