[ambejo]

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.

[odinn7]

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

[ambejo]

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