Detail of product Z (to be launched in next year)

	January (Unit)	February (Unit)	March (Unit)	April May (Unit) (units)
Sales	1,000	1,200	1,400	1,600 1,800

Notes: Unit selling price = $20
Purchase price = $12

Other information:
· Closing stock to be maintained sufficient for 20% of the following month’s sales
· All sales in credit in which 40% to be received in 1 months 55% in 2 months time and the rest to be treated as bad debts.
· About 60% of creditors to be settled in 1 month time which entitled for 5% cash discount and the rest in two months time. (Purchases made in the month of production)
· Monthly overhead estimated at $500 for the first two months thereafter will be increased by 20%. Overhead payable one month in arrears.
· Monthly salary estimated at $800 and payable in the month of occurred.
· Machinery costing $6,000 to be acquired in January and 10% of payment made immediately with the remaining amount settled by two equal instalments in the following months. Company’s policy is to provide depreciation at 20% on cost.
· A monthly loan repayment of $1,000 will be paid in which $120 is interest.
· Dividend of $15,000 will be paid in March
· The bank balance at 1 January is $3,000 positive


Required:
Prepare a monthly cash budget for each of the four months to 30 April (ie for January, February, March and April), showing the cash balance at the end of each month.

What did you get so far when you tried to do this?

Hi odinn 7,

All the while so far I did some searches online and there were plenty of formats and some Q&A samples. But unfortunately I'm totally lost on how to put the figures and the formats to be used for the cash budget.

Even I tried to search for similar sample question and I could not find any.

Thank You