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Analysis of records shows that debtors settle

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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.

Reference no: EM132431337

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