Construct a typical singe month cash budget

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The Upston Company is a manufacturer of textile apparels. The company is endeavoring to prepare its cash budget on monthy basis. The forecasted monthly sales are assumed to be constant each month at Rs 5 million. All of the sales are made on credit and cash recovery pattern is: 33% in the month of sale, 33% in the month following the sale, and the remaining 34% customers pay in the second month following the sale. Purchases of raw material are made on credit in such a way that each month puchases are made @75% of next month sales. The payment of credit purchases are made in the month following the month of purchases. The total of other cash payments for wages, utilities,rent, and taxes is assumed to be constant at Rs 1.1 million per month. Construct a typical singe month's cash budget from the information given above. Assume that customers who pay in the month of sale receive a disount of 2%?

Reference no: EM132396690

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