Question 1

OCTOBER NOVEMBER DECEMBER

CREDIT SALES 400,000 525,000 600,000

RECEIPTS FROM CUSTOMERS

OCTOBER NOVEMBER DECEMBER

CASH SALES 20% 65,000 70,000 83,000

RECEIPTS FROM DEBTORS :

In month of sale 20% 80,000 105,000 120,000
One month after sale 60% 240,000 315,000
Two months after sale 18% 72000

TOTAL SALES RECEIPTS 590,000

PAYMENT TO CREDITORS

DECEMBER

Purchases 280,000

Payments for Materials

In Month of Purchase 30% 84000
One month after Purchase 70% 161,000
245000
CASH BUDGET

January February March

RECEIPTS
From Customers 590,000
Total Receipts 590,000
PAYMENTS
To Suppliers of Materials 245,000
Selling, Dist'n & Admin 380,000
Purchase of Web Server 76,000
Dividends 9,000
Total Payments 710,000
Net Inflow/(Outflow) -120,000
Opening Bank Balance 40,000
Excess Cash/(Deficiency) -80,000

FINANCING :

Borrowing 100,000

Repayment of Loans

Interest Payments
Closing Bank Balance 20,000
Question 2
MAY JUNE JULY AUGUST SEPT TOTAL

BUDGETED SALES 250,000 300,000 400,000 600,000 320,000

RECEIPTS FROM CUSTOMERS

MAY JUNE JULY AUGUST SEPT TOTAL

RECEIPTS FROM DEBTORS :

In month of sale 25% 100,000 150,000 80,000 330,000

One month after sale 70% 210,000 280,000 420,000 910,000

Two months after sale 3% 7,500 9000 12000 28,500

TOTAL SALES RECEIPTS 317,500 439,000 512,000 1,268,500

PAYMENT TO CREDITORS

MAY JUNE JULY AUGUST SEPT TOTAL

Purchases 240,000 350,000 175,000

Payments to Creditors

One month after Purchase 180,000 240,000 350,000 770,000

180,000 240,000 350,000 770,000

 CASH BUDGET

JULY AUGUST SEPT TOTAL

RECEIPTS

From Customers 317,500 439,000 512,000 1,268,500

Total Receipts 317,500 439,000 512,000 1,268,500

PAYMENTS

To Suppliers of Materials 180,000 240,000 350,000 770,000

Salaries & Wages 45,000 50,000 40,000 135,000

Advertising 130,000 145,000 80,000 355,000

Purchase of Equipment 10,000 10,000

Rent 9,000 9,000 9,000 27,000

Total Payments 374,000 444,000 479,000 1,297,000

Net Inflow/(Outflow) -56,500 -5,000 33,000 -28,500

Opening Bank Balance 44,500 28,000 23,000 44,500

Excess Cash/(Deficiency) -12,000 23,000 56,000 16,000

FINANCING :

Borrowing 40,000 40,000

Repayment of Loans -40,000 -40000

Interest Payments -1200 -1,200

Closing Bank Balance 28,000 23,000 14,800 14,800

Question 3 Question 3

FEB MARCH APRIL MAY JUNE TOTAL

BUDGETED SALES 200,000 300,000 600,000 900,000 500,000

Credit Sales 80% 160,000 240,000 480,000 720,000 400,000

RECEIPTS FROM CUSTOMERS

FEB MARCH APRIL MAY JUNE TOTAL

RECEIPTS FROM DEBTORS :

In month of sale 10% 48,000 72,000 40,000 160,000

One month after sale 70% 168,000 336,000 504,000 1,008,000

Two months after sale 20% 32,000 48000 96000 176,000

Total receipts from Debtors 248,000 456,000 640,000 1,344,000

Cash Sales 20% 120,000 180,000 100,000 400,000

368,000 636,000 740,000 1,744,000

DIRECT MATERIAL USAGE BUDGET

FEB MARCH APRIL MAY JUNE TOTAL JULY

Cost of Goods Sold 420,000 630,000 250,000 280,000

Closing Inventory 20% 126,000 50,000 56,000

Total requirement 546,000 680,000 306,000

Opening Material Inventory 84,000 126,000 50,000

Purchases 462,000 554,000 256,000

PAYMENTS TO SUPPLIERS OF MATERIALS

FEB MARCH APRIL MAY JUNE TOTAL

Purchases 462,000 554,000 256,000

Payments to Creditors

In Month of Purchase 50% 231,000 277,000 128,000 636,000

One Month after Purchase 50% 126,000 231,000 277,000 634,000

Total Payment for Material 357,000 508,000 405,000 1,270,000

 CASH BUDGET

APRIL MAY JUNE TOTAL

RECEIPTS

From Customers 368,000 636,000 740,000 1,744,000

Total Receipts 368,000 636,000 740,000 1,744,000

PAYMENTS

To Suppliers of Materials 357,000 508,000 405,000 1,270,000

Selling expenses 79,000 120,000 62,000 261,000

Admininistrative Expenses 25,000 32,000 21,000 78,000

Purchase of Equipment 16,000 16,000

Dividends 49,000 49,000

Total Payments 510,000 676,000 488,000 1,674,000

Net Inflow/(Outflow) -142,000 -40,000 252,000 70,000

Opening Bank Balance 52,000 40,000 40,000 52,000

Excess Cash/(Deficiency) -90,000 0 292,000 122,000

FINANCING :

Borrowing 130,000 40,000 170,000

Repayment of Loans -170,000 -170,000

Interest Payments -4700 -4,700

Closing Bank Balance 40,000 40,000 117,300 117,300

Interest 1% per month

Interest on $130,000 borrowed in April 3900 (1% x 130,000 x 3 months)

Interest on $40,000 borrowed in May 800 (1% x 40,000 x 2 months)

4700
Question 4
FEB MARCH APRIL MAY JUNE TOTAL JULY

Budgeted Units 26,000 40,000 65,000 50,000 30,000 28,000

Budgeted Selling Price $10 $10 $10 $10 $10 $10

BUDGETED SALES 260,000 400,000 650,000 500,000 300,000 280,000

RECEIPTS FROM CUSTOMERS

FEB MARCH APRIL MAY JUNE TOTAL JULY

RECEIPTS FROM DEBTORS :

In month of sale 20% 130,000 100,000 60,000 290,000

One month after sale 70% 280,000 455,000 350,000 1,085,000

Two months after sale 10% 26,000 40000 65000 131,000

TOTAL SALES RECEIPTS 436,000 595,000 475,000 1,506,000

PRODUCTION BUDGET

FEB MARCH APRIL MAY JUNE TOTAL JULY AUG

Budgeted Unit Sales 26,000 40,000 65,000 50,000 30,000 28,000 25,000

Ending Inventory 40% 26000 20,000 12,000 11,200 10,000

Total Requirements 66,000 85,000 62,000 41,200 38,000

Opening Inventory 16000 26,000 20,000 12,000 11,200

Units To Be Purchased 50,000 59,000 42,000 29,200 26,800

FEB MARCH APRIL MAY JUNE TOTAL JULY

Units to be Purchased 50,000 59,000 42,000 29,200 26,800

Purchase Price $4 $4 $4 $4 $4

Purchases $200,000 $236,000 $168,000 $116,800 $107,200

PAYMENTS TO SUPPLIERS OF MATERIALS

FEB MARCH APRIL MAY JUNE TOTAL

Purchases $200,000 236,000 168,000 116,800

Payments to Creditors

In Month of Purchase 50% 118,000 84,000 58,400 260,400

One Month after Purchase 50% 100,000 118,000 84,000 302,000

Total Payment for Material 218,000 202,000 142,400 562,400

 CASH BUDGET

APRIL MAY JUNE TOTAL

RECEIPTS

From Customers 436,000 595,000 475,000 1,506,000

Total Receipts 436,000 595,000 475,000 1,506,000

PAYMENTS

To Suppliers of Materials 218,000 202,000 142,400 562,400

Selling expenses 4.00% 26,000 20,000 12,000 58,000

Advertising 200,000 200,000 200,000 600,000

Purchase of Equipment 16,000 40,000 56,000

Dividends 15,000 15,000

Rent 18,000 18,000 18,000 54,000

Salaries 106,000 106,000 106,000 318,000

Utilities 7,000 7,000 7,000 21,000

Total Payments 590,000 569,000 525,400 1,684,400

Net Inflow/(Outflow) -154,000 26,000 -50,400 -178,400

Opening Bank Balance 74,000 50,000 50,000 74,000

Excess Cash/(Deficiency) -80,000 76,000 -400 -104,400

FINANCING :

Borrowing 130,000 54040 184,040

Repayment of Loans 26000 -26,000

Interest Payments 3640 -3,640

Closing Bank Balance 50,000 50,000 50,000 50,000

Interest 1% per month

Interest on $130,000 borrowed in April outstanding for 2 months 2600 (1% x 130,000 x 2 months)

Interest on net amount of $104,000 outstanding at end of May 1040 (1% x 104,000 x 1 months)

3640
Cash Budget
MAY JUNE JULY AUG SEPT TOTAL OCT

BUDGETED SALES 62,000 58,000 60,000 70,000 65,000

RECEIPTS FROM CUSTOMERS

MAY JUNE JULY AUG SEPT TOTAL

RECEIPTS FROM DEBTORS :

Credit Sales 60% 37,200 34,800 36,000 42,000 39,000

Received:

One month after sale 75% 26,100 27,000 31,500 84,600

Two months after sale 25% 9,300 8700 9000 27,000

Cash Sales 40% 24,000 28,000 26,000 78,000

TOTAL SALES RECEIPTS 59,400 63,700 66,500 189,600

PAYMENTS TO SUPPLIERS OF MATERIALS

MAY JUNE JULY AUG SEPT TOTAL

Purchases 35% $20,300 21,000 24,500 22,750

Payments to Creditors

In Month of Purchase 30% 6,300 7,350 6,825 20,475

Less 10% 630 735 683 2,048

5,670 6,615 6,143 18,428

One Month after Purchase 70% 14,210 14,700 17,150 46,060

Total Payment for Material 19,880 21,315 23,293 64,488

 CASH BUDGET

JULY AUG SEPT TOTAL

RECEIPTS

From Customers 59,400 63,700 66,500 189,600

Sale of Cash Register 400 400

Total Receipts 59,400 64,100 66,500 190,000

PAYMENTS

To Suppliers of Materials 19,880 21,315 23,293 64,488

Payroll Expenses 30.00% 18,000 21,000 19,500 58,500

Property taxes 3,000 3,000

Purchase of Register 18,000 18,000

Other Expenses 2,000 2,000 2,000 6,000

Total Payments 42,880 44,315 62,793 149,988

Net Inflow/(Outflow) 16,520 19,785 3,708 40,013

Opening Bank Balance -20,000 20,000 20,000 -20,000

Excess Cash/(Deficiency) -3,480 39,785 23,708 20,013

FINANCING :

Borrowing 23,480 23,480

Repayment of Loans $18,846 3,615 22,461

Interest Payments 2% per month $939 $93 $1,032

Closing Bank Balance 20,000 20,000 20,000 20,000

Interest on $23,480 borrowed in July outstanding for 2 months 939.2 (2% x 23480 x 2 months)

Interest on net amount of $4,624.20 outstanding at end of September 92.684 (2% x (23,480-18846) x 1 month)

1031.884
Cash Budget
DEC JAN FEB MAR TOTAL

BUDGETED SALES 130,000 110,000 130,000 120,000

RECEIPTS FROM CUSTOMERS

JAN FEB MAR TOTAL

RECEIPTS FROM DEBTORS :

Credit Sales 70% 77,000 91,000 84,000

Less 10% 7,700 9,100 8,400

69,300 81,900 75,600 226,800

Cash Sales 30% 33,000 39,000 36,000 108,000

TOTAL SALES RECEIPTS 102,300 120,900 111,600 334,800

PAYMENTS TO SUPPLIERS OF MATERIALS

DEC JAN FEB MAR TOTAL

Purchases 40% $52,000 44,000 52,000 48,000 144,000

Payments to Creditors

One Month after Purchase 52,000 44,000 52,000 148,000

Total Payment for Material 52,000 44,000 52,000 148,000

 CASH BUDGET

JAN FEB MAR TOTAL

RECEIPTS

From Customers 102,300 120,900 111,600 334,800

Sale of Cash Register 1,000 1,000

Interest Received 2,000 2,000

Total Receipts 102,300 123,900 111,600 337,800

PAYMENTS

To Suppliers of Materials 52,000 44,000 52,000 148,000

Payroll Expenses 35.00% 38,500 45,500 42,000 126,000

Property taxes 3,000 3,000

Purchase of Equipment 26,000 26,000

Other Expenses 10,000 10,000 10,000 30,000

Total Payments 103,500 99,500 130,000 333,000

Net Inflow/(Outflow) -1,200 24,400 -18,400 4,800

Opening Bank Balance -10,000 49,750 65,000 -10,000

Excess Cash/(Deficiency) -11,200 74,150 46,600 -5,200

FINANCING :

Borrowing 60,950 9,704 70,654

Repayment of Loans $7,322 7,322

Interest Payments 1.5% per month $1,829 $804 $2,633

Closing Bank Balance 50% of next month's purchase 49,750 65,000 55,500 55,500

Interest on $60,950 borrowed in January outstanding for 2 months 1828.5 (1.5% x 60950 x 2 months)

Interest on net amount of $53,628.50 outstanding at end of March 804.4275 (1.5% x (60950-7,322) x 1 month)

2632.9275