A company is expecting to have Rs.

25,000 cash in hand on 1st April 2022 and it requires you to

1 prepare cash budget for the three months, April to June 2022. The following information is
supplied to you.

Amount in 000's
particulars sales purchase wages expenses
February ₹ 70,000 ₹ 40,000 ₹ 8,000 ₹ 6,000
March ₹ 80,000 ₹ 50,000 ₹ 8,000 ₹ 7,000
April ₹ 92,000 ₹ 52,000 ₹ 9,000 ₹ 7,000
May ₹ 100,000 ₹ 60,000 ₹ 10,000 ₹ 8,000
June ₹ 120,000 ₹ 55,000 ₹ 12,000 ₹ 9,000
other information
1. period of credit allowed by suppliers is two months.
2. 25% of sale is for cash and the period of credit allowed to customers for credit sale is one month.
3. delay in payment of wages and expenses one month.
4. income tax Rs.25000 (in 000's) is to be paid in June 2022

cash budget for the first quarter of the financial year 2022-2023
particulars April May June
opening cash balance ₹ 25,000.00 ₹ 53,000.00 ₹ 81,000.00
receipts
cash sales(25%) ₹ 23,000.00 ₹ 25,000.00 ₹ 30,000.00
credit sales (75%) ₹ 60,000.00 ₹ 69,000.00 ₹ 75,000.00
total receipts (A) ₹ 108,000.00 ₹ 147,000.00 ₹ 186,000.00
payments
purchase ₹ 40,000.00 ₹ 50,000.00 ₹ 52,000.00
wages ₹ 8,000.00 ₹ 9,000.00 ₹ 10,000.00
expenses ₹ 7,000.00 ₹ 7,000.00 ₹ 8,000.00
income tax ₹ 25,000.00
total payments (B) ₹ 55,000.00 ₹ 66,000.00 ₹ 95,000.00
Closing cash balance (A-B) ₹ 53,000.00 ₹ 81,000.00 ₹ 91,000.00

2 PREPARE A CASH BUDGET FOR THE 1ST QUARTER OF 2022

MONTH SALES MATERIALS WAGES OVERHEADS
NOVEMBER 14 9.6 3 1.7
DECEMBER 15 9 3 1.9
JANUARY 16 9.2 3.2 2
FEBRUARY 17 10 3.6 2.2
MARCH 18 10.4 4 2.3
Amount in the table are in lakhs
SALES & DEBTORS
10% CASH AND CARRY, 50% OF THE CREDIT ARE COLLECTED IN THE NEXT MONTH & REMAINING THEREAFTER
LAG IN PERIOD
MATERIALS 2 MONTHS
WAGES 1/4TH MONTH
OVERHEADS 1/2 MONTH
DESIRED OPENING BANK BALANCE Rs.6 lakhs
P&M INSTALLED IN NOVEMBER 2021 @ A COST OF Rs.96 lakhs, ITS MONTHLY INSTALMENT IS Rs.2lakhs PAYABLE FR
DIVIDEND @ 5% ON PREFERENCE SHARE CAPITAL OF Rs.2 CRORE WILL BE PAID ON March 1st, 2022
ADVANCE TO BE RECEIVED FOR A PREDETERMINED SALE OF VEHICLES Rs.9Lakhs IN Jan 2022
DIVIDEND FROM INVESTMENTS AMOUNTING TO Rs.100000 ARE EXPECTED TO BE RECEIVED IN March
ADVANCE INCOME TAX TO BE PAID IN March 2022 Rs.2 lakhs

cash budget for the first quarter 2022

particulars jan feb march
opening bank balance ₹ 600,000.00 ₹ 1,295,000.00 ₹ 1,200,000.00
receipts
cash sales ₹ 160,000.00 ₹ 170,000.00 ₹ 180,000.00
1st installment of credit sales ₹ 675,000.00 ₹ 720,000.00 ₹ 765,000.00
2nd intsallment of credit sales ₹ 630,000.00 ₹ 675,000.00 ₹ 720,000.00
assest sales advance (vechile) ₹ 900,000.00
dividend ₹ 100,000.00
total receipts ₹ 2,965,000.00 ₹ 2,860,000.00 ₹ 2,965,000.00
payments
P&M ₹ 200,000.00 ₹ 200,000.00 ₹ 200,000.00
dividend paid ₹ 1,000,000.00
income tax ₹ 200,000.00
materials ₹ 960,000.00 ₹ 900,000.00 ₹ 920,000.00
wages ₹ 315,000.00 ₹ 350,000.00 ₹ 390,000.00
overheads ₹ 195,000.00 ₹ 210,000.00 ₹ 225,000.00
total payments ₹ 1,670,000.00 ₹ 1,660,000.00 ₹ 2,935,000.00
closing balance ₹ 1,295,000.00 ₹ 1,200,000.00 ₹ 30,000.00
s one month.
EMAINING THEREAFTER

MENT IS Rs.2lakhs PAYABLE FROM JAN 2022 ONWARDS

arch 1st, 2022
n 2022
EIVED IN March