Reference no: EM132468972

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:

Question : Please provide cash budget for January, February and March.