CASH BUDGET budgst for the months of January to March 2013. a cash Sales Purchas

Question

CASH BUDGET budgst for the months of January to March 2013. a cash Sales Purchases Wages Variable Overbesds November 2012 20,000 20,000 Deoember 2012 30,000 25,000 20,000 20,000 5,000 0,000 uy 2013 0000 30000 0,000 5,000- Februry 2013 60,000 45,000 March 2013 20,000 20,000 60,000 3 50,000 6,000 The cash balance on I" Janunry 2013 is GHe 25,000 Ficed overheads are GHe 2,000 per month peable inthe same month. The GH¢ 2,00 inchdes GHe 100 (nun-cash) deprociation I. 2. 3. Roccipt for sales follow this patiern 50%during phe month o(sale a. b. 25% during de following month c. 25%during uhe next following month 4 It is the policy of the firm to pay trade croditors as follows: 20% during the month of ale b. 40% dring the following month c. 40% dring the next following month 5, wages are paid 5% in the month earngd and 50%inthe following month irzoWariable overhcads are incurrod and poik insk ine month

Explanation / Answer

Cash Budget For Janury, February and March January February March Begning balance 25000 1600 -16800 Cash Receipts: Collection from accounts receivables (WN1) 32500 47500 55000 Total cash available 57500 49100 38200 Cash Payments: Payments to accounts payable (WN2) 24000 31000 40000 Fixed overhead (2000-100) 1900 1900 1900 Wages 25000 25000 20000 (20000*50%)+(30000*50%) (30000*50%)+(20000*50%) (20000*50%)+(20000*50%) Variable overhead 5000 8000 6000 Purchase of fixed assets 0 0 30000 Total cash Payments 55900 65900 97900 Closing balance 1600 -16800 -59700 WN1 - Collection from accounts receivables January Auguest March Regarding sales of November month 5000 (20000*25%) Regarding sales of December month 7500 7500 (30000*25%) (30000*25%) Regarding sales of January month 20000 10000 10000 (40000*50%) (40000*25%) (40000*25%) Regarding sales of February month 30000 15000 (60000*50%) (60000*25%) Regarding sales of March month 30000 (60000*50%) Total collection 32500 47500 55000 WN1 - Payments to accounts payables January Auguest March Regarding purchase of November month 8000 (20000*40%) Regarding purchase of December month 10000 10000 (25000*40%) (25000*40%) Regarding purchase of January month 6000 12000 12000 (30000*20%) (30000*40%) (30000*40%) Regarding purchase of February month 9000 18000 (45000*20%) (45000*40%) Regarding purchase of March month 10000 (50000*20%) Total collection 24000 31000 40000

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