Cash Inflows: Cash Surplus/loan Requirement
Cash Inflows: Cash Surplus/loan Requirement
Cash Inflows: Cash Surplus/loan Requirement
All sales are made on cash and realized in the same monthe the sales occur. Purchases are paid for in the month they occur.
A monthly salary of 4800 is payable. while Rent for the premises is 2000 per month.
tax liablity is 12000 to be paid in Dec. cash at the start of the month amounted to 400.
a minimum cash requirement of 6000/- has to be maintaned for each month.
You are to pre pare a cash budget for teh last three months.
Dec Jan Feb
Sales 160000 40000 40000
Purchases 140000 40000 40000
SOLUTION
Cash inflows
collections 160000 40000 40000
Payments are typically made during the month following the one in which these costs have been incurred.
General and admin salaries will amount to 27,000/-a month, lease payment will be 9,000/- a month,
depreciation charges are 36,000/- per month, miscellaneous expense will be 2,700/- per month.
Income tax of 63,000/- is due in September. A payment of 180,000/- is to be made in October for renovation.
Cash on hand on july 1 amounted to 132,000/- and a minimum cash balance of 90,000/- will be maintained throughout the cash
CIF
collections 1st month 36000 54,000 72,000 36,000
2nd 135000 270,000 405,000 540,000
3rd 27000 27,000 54,000 81,000
total 198000 351,000 531,000 657,000
COF
Payments
labor and wages 90000 (126,000) (882,000) (306,000)
alaries -27000 (27,000) (27,000) (27,000)
lease -9000 (9,000) (9,000) (9,000)
Misc -2700 (2,700) (2,700) (2,700)
tax (63,000)
prgress (180,000)
been incurred.
a month,
onth.
ber for renovation.
ill be maintained throughout the cash budget period.