Cash Budget (Format)

Name of the Firm : --------------

Cash Budget
For the period from ------- to -------

Particulars Januar February March

y Taka Taka
Taka
1) Opening Cash Balance **** ****1 ****2
2) Receipts :
Capital Receipts
Revenue Receipts
Periodic Receipts
Non-periodic Receipts **** **** ****
**** **** ****
3) Total Cash Available Before Disbursements ( 1 + 2 )
4) Disbursements :
Capital Disbursements
Revenue Disbursements
Periodic Disbursements
Non-periodic Disbursements
**** **** ****
**** **** ****
5) Cash Balance After Disbursements ( 3 – 4 )
6) Minimum Cash Balance Required **** **** ****
**** **** ****
7) Surplus / (Shortage) ( 5 – 6 )

8) Financing :

a) Loan Taken
b) Issue of Debenture
c) Repayment of Loan with Interest
d) Redemption of Debenture with Interest

9) Closing Balance ( 5 + 8a + 8b –8c – 8d ) **** 1 ****2 ****3

10) Outstanding Loan Balance :

a) Balance of Loan **** **** ****
b) Balance of Debenture **** **** ****
 Problems on Cash Budget

Problem No. 01

You are given the following budgeted information relating to Kalmilata Ltd.:

a) Estimated Receipts & Payments are:

Month Receipts (Taka) Payments (Taka)
January 60,000 90,000
February 80,000 1,10,000
March 90,000 1,20,000
April 2,10,000 1,10,000
b) Cash Balance as on January 01, 2023 : Tk.17,250.
c) The Company maintains a minimum Cash Balance of Tk.10,000.
d) Fund can be borrowed from Bank in multiples of Tk.1,000 @ 12% interest per annum.

Prepare a Cash Budget for the months of January to April, 2023. There is a plan of starting a
Project with an initial cash requirement of Tk.1,60,000 in April. Will it be possible to start the
Project without borrowing?

Solution:

Workings:

Repayment of Loan with Interest in April:

a) January Loan: Principal = Tk.23,000

+ Interest @12% for 4 months: Tk.23,000 × 12/100 × 4/12 = Tk.920
Amount = Tk.23,000 + 920 = Tk.23,920
b) February Loan: Principal = Tk.30,000
+ Interest @ 12% for 3 months: Tk.30,000× 12/100 × 3/12 = Tk.900
Amount = Tk.30,000 + 900 = Tk.30,900
c) March Loan: Principal = Tk.30,000
+ Interest @ 12% for 2 months: Tk.30,000 × 12/100 × 2/12 = Tk.600
Amount = Tk.30,000 + 600 = Tk.30,600

Total Loan repayment with Interest = Tk.23,920 + 30,900 + 30,600 = Tk.85,420

Page No. 02/04

 Kalmilata Ltd.
Cash Budget
For the Period from January to April, 2023
Particulars January February March April
Taka Taka Taka Taka
1. Opening Balance 17,250 10,250 10,250 10,250
60,000 80,000 90,000 2,10,000
2. Receipts

3. Total Cash Available (1 + 2) 77,250 90,250 1,00,250 2,20,250

4. Disbursements 90,000 1,10,000 1,20,000 1,10,000

5. Cash Balance After Disbursements (12,750) (19,750) (19,750) 1,10,250

(3 – 4)
6. Minimum Balance Required 10,000 10,000 10,000 10,000

7. Surplus/(Shortage) (5 – 6) (22,750) (29,750) (29,750) 1,00,250

8. Financing:
a) Loan taken 23,000 30,000 30,000 Nil
b) Repayment of Loan with Nil Nil Nil 85,420
Interest
9. Closing Balance (5 + 8a – 8b) 10,250 10,250 10,250 24,830

10. Outstanding Loan Balance 23,000 53,000 83,000 Nil

Comment: The available fund in April would be Tk.24,830 – Tk.10,000 = Tk.14,830 which is
considered not to be enough to start the Project requiring Tk.1,60,000. Therefore, it will not be
possible to start the Project in April without borrowing.

Page No. 03/04

Problem No. 02 (Home Task)

The following budgeted information has been collected from the records of Banalata Ltd.:

a) Cash Balance as on July 01, 2022: Taka 13,650.

b) The Firm maintains a minimum Cash Balance of Taka 5,000.
c) Loan Balance as on July 01, 2022 : Taka 25,000 (Taken on May 01, 2022)
d) A Financier has agreed to provide Loan in multiples of Tk. 1,000 @ 12% interest per annum.
e) Estimated Cash Receipts & Disbursements are:
Month Receipts (Taka) Disbursements (Taka)
July 1,20,000 70,000
August 1,40,000 1,20,000
September 1,70,000 2,00,000
October 2,20,000 90,000

Prepare a Cash Budget for the months of July to October, 2022.

The Firm wants to buy a Plant in October at a price of Tk.1,50,000. Will it be possible to buy the
Plant without borrowing?

Page No. 04/04