A.

SALES FORECAST
Assume selling price is PHP100/unit. Sales for each month are expected to be collected as
follows:
‣Month of sales : 20%
‣A month after sales: 50%
‣2 months after sales: 30%

B. PRODUCTION COST
Assume that cost per unit is PHP50.

C. OPERATION COST
The following expense items will be paid based on the following periods:
‣Rent payments: Rent of PHP5,000 will be paid each month.
‣Wages and salaries: Fixed salaries for the year are PHP96,000, or PHP8,000 per month. Wages
are estimated as 10% of monthly sales.
‣Tax payments: Taxes of PHP25,000 must be paid in April.

D. OTHER CASH PAYMENTS

‣Fixed-asset outlays: New machinery costing PHP130,000 will be purchased and paid for in
April.
‣Interest payments: An interest payment of PHP10,000 is due in May.
‣Cash dividend payments: Cash dividends of PHP20,000 will be paid in January.
‣Principal payments (loans): A PHP20,000 principal payment is due in February

E. MINIMUM CASH
- Moreover, [A] Company has a beginning cash balance of PHP80,000 and would like to
maintain an ending cash balance of PHP100,000 per month. Prepare [A] Company’s Cash
Budget for January to May.