Cash Budget
Cash Budget
Cash Budget
ACTUAL (Rs.)
MONTH
BUDGETED (Rs.)
January
90000
April
100000
February
90000
May
90000
March
80000
June
85000
ACTUAL (Rs.)
MONTH
BUDGETED (Rs.)
January
50000
April
60000
February
45000
May
55000
March
40000
June
40000
Actual
Wages(Rs.)
Actual
Expenses(Rs.)
MONTH
Budgeted
Wages(Rs.)
Budgeted
Expenses(Rs.)
January
25000
7000
April
30000
10000
Februar
y
20000
8000
May
25000
8000
March
28000
8000
June
22000
7000
D. Special Payment Advance income tax in May Rs.5000 and Plant in April Rs.15000.
E. Rent Rs.400 payable each month not included in expenses.
F. 10% of purchases and sales are on cash basis.
G. Credit purchases are paid after one month and credit sales are collected after two
months. Time lag in payment of wages and expenses are half month.
H. Cash and Bank balance on 1st April, 2014 Rs.15000.
2. Prepare a Cash Budget for Sept Dec2014.
Month
Credit Purchases
Credit Sales
Wages
Selling
Expenses
Overheads
July
85000
160000
32000
8000
10000
August
92000
185000
37000
9500
11500
Septembe
r
100000
210000
42000
10500
13000
October
120000
245000
49000
12500
14500
90000
178000
35500
8900
10500
November
December
98000
182000
36000
9000
11000
Sales(Rs.)
Purchases(R
s.)
Wages(Rs.)
Selling
Expenses(Rs.)
Overhead(Rs.
)
April
100000
70000
8500
3500
4000
May
120000
80000
9500
3500
4500
June
140000
90000
9500
3500
6000
July
160000
100000
12000
3500
6500
August
180000
110000
14000
3500
7000
Sales(Rs.)
Purchases(Rs
.)
Overhead(Rs.
)
Depreciation
(Rs.)
Wages(Rs.)
August
84000
48000
8400
720
26000
September
52000
50000
6400
720
18000
October
56000
28000
7200
720
19200
November
64000
32000
6800
720
24000
December
76000
36000
7600
720
24000
(a) All purchases are on a credit basis and payments are made after two months from the
day of the transaction.
(b) 25% of the sales are on credit; the debtors are expected to settle their accounts in the
month after the month in which the transaction takes place.
(c) Wages are paid in cash as they become due.
(d) The bank balance on 1st October is estimated to be Rs.7200.
(e) Overheads other than Depreciation includes
(i) Gas & electricity charges: For August Rs.280, September Rs.300, October Rs.320,
November Rs.400 and December Rs.440. The accounts for Gas & electricity (quarter
ended 30th September) will be paid in October2014 and they are estimated to be Rs.860.
(ii) Rates: are paid half yearly in April & October and the rates for the year beginning 1st
April2014 amounts to Rs.7680.
(iii) Certain other items which are all cash transactions.
5. Prepare a Cash Budget for the first six months of 2014 (a) Sales are 80% on credit and 20% for cash.
(b) In terms of credit sales, 60% are collected in the month after the sale; 30% in the second
month and 10% in the third month. There are no bad debts.
(c) Sales are estimated as Month
Oct1
3
Nov1
3
Dec1
3
Jan1
4
Feb1
4
Mar1
4
Apr1
4
May1
4
Jun1
4
Jul1
4
Sales(Rs
.)
30000
0
40000
0
50000
0
25000
0
20000
0
20000
0
30000
0
25000
0
20000
0
3000
00
(d) The store has a gross margin of 20% on sales and pays for each month anticipated sales
in the preceding month.
(e) Wages and Salaries paid are Month
Amount
(Rs.)
Jan14
Feb14
Mar14
Apr14
May14
Jun14
30000
40000
50000
50000
40000
35000
Sales (Rs.)
Purchases (Rs.)
Wages (Rs.)
Miscellaneous
Exp. (Rs.)
Februa
ry
120000
84000
10000
7000
March
130000
100000
12000
8000
April
80000
104000
8000
6000
May
116000
106000
10000
12000
June
88000
80000
8000
6000
(i) Sales -20% realized in the month of sale; discount allowed @ 2%; balance realized equally
in two subsequent months.
(ii) Purchases are paid for in the month following the month of supply.
(iii) Wages 25% are paid as arrears in the following month.
(iv) Miscellaneous Expenses are paid a month in arrears.
(v) Rent Rs.1000 per month are paid quarterly in advance due in April.
(vi) Income Tax first installment of advance tax Rs.25000 due on or before 15th June.
(vii) Income from Investment Rs.5000 realized quarterly in April, July, etc.
(viii) Cash in hand Rs.5000 on 1st April2014.
ANSWERS
1. Cash Balance
2. Cash Balance
3. Cash Balance
4. Cash Balance
5. Cash Balance
Rs.233000.
Rs.(62936).