Reference no: EM132431337
The opening cash balance on 1st Jan was expected to be £30,000. The sales budgeted were as follows
November December January February March
£ 80,000 90,000
75,000 75,000
80,000
Analysis of records shows that debtors settle according to the following pattern:
60% within the month of sale, 25% the month following, 15% the month following. Extracts from the Purchases budget were as follows:
December January February March
60,000 55,000 45,000
55,000
All purchases are on credit and past experience shows that 90% are settled in the month of purchase and the balance settles the month after.
Wages are £15,000 per month and overheads of £20,000 per month (including £5,000 depreciation) are settled monthly.
Taxation of £8,000 has to be settled in February and the company will receive settlement of an insurance claim of £25,000 in March.
Required:
Please provide cash budget for January, February and March.