Month Sales Purchase wages Manufacturing Administrative Se

(credit) (credit) expenses expenses exp

2010 Nov 30000 15000 3000 1150 1060 5

Dec 35000 20000 3200 1225 1040 5
2011 Jan 25000 15000 2500 990 1100 6
Feb 30000 20000 3000 1050 1150 6
Mar 35000 22500 2400 1100 1220 5
April 40000 25000 2600 1200 1180 7
1. From the following forecast of income and expenditure, prepare a cash
budget for the months January to April, 2011.

Additional information is as follows:

1. The customers are allowed a credit period of 2 months.

2. A dividend of Rs 10,000 is payable in April.

3. Capital expenditure to be incurred: Plant purchased on 15th January for 15,000;

a Building has been purchased on 1st March and the payments are to be made in
monthly installments of Rs 2,000 each.

4. The creditors are allowing a credit of 2 months.

5. Wages are paid on the 1st of the next month.

6. Lag in payment of other expenses is one month.

7. Balance of cash in hand on 1st January, 2011 is Rs 15,000.

2. ABC Co. wishes to arrange overdraft facilities with its Bankers during the
period April to June, 2011 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 :
50 per cent of credit sales are realized in the month following the sales and
remaining 50 per cent in the second month following. Creditors are paid in the
month following the month of purchase. Wages are paid on first of the
following month.

Cash at Bank on 1.4.2011 (estimated) Rs 25,000.

3. From the following information prepare a cash budget for the months of
June and July.

Additional Information:
1. Advance tax of Rs 4,000 payable in June and in December 1994
2. Credit period allowed to debtors is two months
3. Credit period allowed by the vendors or suppliers
4. Delay in the payment of other expenses one month
5. Opening balance of cash on 1st June is estimated as Rs.20,000/-

4. From the estimates of income and expenditure, prepare cash budget for the
months from April to June.
● Plant worth Rs. 20,000 purchase in June 25% payable immediately and
the remaining in two equal installments in the subsequent months
● Advance payment of tax payable in Jan and April Rs 6,000
● Period of credit allowed:
● By suppliers 2 months
● To customers 1 month
● Dividend payable Rs.10,000 in the month of June
● Delay in payment of wages and office expenses 1 month and selling
expenses ½ month. Expected cash balance on 1st April is Rs. 40,000.