Preparation of sales budget:

January February March

Inventory in units 100,000 2,00,000 3,00,000

Sales @ 10 X 10 X10 X10

BDT 10,00,000 20,00,000 30,00,000

Sales per unit is @BDT. 10. Inventory per quarter are consecutively 1, 00,000 units, 200,000s unit
and 3, 00,000 units

Accounts Receivable balance from last December BDT 10,000. Cash collections from Accounts
Receivable @ 75% in the month of sale, 25% of the following months.
January (Tk) February(tk) March (tk)

Beg balance 10,000

Collection 75% in 7,50,000 2,50,000

January month,
following month
(10,00,000
X75%),25%
(20,00,000 X

Collection 75% in 15,00,000 500,000

month of
February and
following month
(20,00,000 X
75%);25%

Collection 75% in 22,50,000

month of March,
 following month
(30,00,000 X
75%),25%

Bdt 7,60,000 17,50,000 27,50,000

Preparation of Cash Budget:

Cash payment on Accounts payable on purchase of purchase raw materials units @.50. Raw material
purchased in January is 11, 00,000 units, February 10, 50, 000, March 12,00,000 units
January February March

Purchase units 11,00,000 10,50,000 12,00,000

@ .50 x.50 X .50 x.50

Bdt 5,50,000 5,25,000 600,000

Due to accounts payable from the month of December BDT 15,000. Payment schedule first month
payment 50% , second month 35% third month 15%
January(tk) February(tk) March(tk)

15,000
Beginning Balance

(Payment of January 5,50,000@ 2,75,000 1,92,500 82,500

50%);35%;15%
(Payment of February 5,25,000@ 2,62,500 183,750
50%);35%;15%

(Payment of March 5,50,000@ 275,000

50%);35%;15%

Total= 2,90,000 4,55,000 5,41,250