Q2: From the following information supplied by B Ltd., prepare a Cash Budget for the period from 1st September 2012 to 31/12/2012

Months Credit Purchase (Rs.)

Credit Sales (Rs.) Wages (Rs.) Selling Overhead (Rs.)

July 85000 160000 32000 18000

August 92000 185000 37000 21000

September 100000 210000 42000 23500

October 120000 245000 49000 27000

November 90000 178000 35500 19400

December 98000 182000 36000 20000

Additional information:-

1. Expected Cash balance on 1st September Rs.10500

2. Period of credit allowed to debtors-2 months

3. Period of credit allowed by Creditors-1 month

4. Log in payment of wages & selling overhead-1 month

5. Selling commission @ 2 % on Sales is payable one month after Sales

6. Expenditure on machinery worth Rs.50000 is payable in October

7. Expected Cash Sales per month Rs. 15,000. No commission is payable on Cash Sales.

Q3: From the following information, you are required to prepare a Cash Budget for the period from 1st Jan 2012 to 31st March 2012 indicating the overdraft facilities required by the firm at the end of each month.

Period Sales (Credit) Purchase (Credit) Wages

November’12 180000 124800 12000

December’12 192000 144000 14000

January’13 108000 243000 11000

February’13 174000 246000 10000

March’13 126000 268000 15000

Additional information:-

1. 50 % of Credit Sales are realized in the month following the sales & the remaining 50% in the second month following

2. Creditors are paid in the month following the month of purchase

3. Cash at bank on 1.1.2013 (estimated) Rs. 25000

4. Wages are paid on first of the following month.

Q4: From the following information, prepare a Cash Budget for the month of January to April

Month Expected Sales (Rs.) Expected Purchases (Rs.)

January 60000 48000

February 40000 80000

March 45000 81000

April 40000 90000

Wages are to be paid to workers Rs. 5000 each month. Balance at Bank on 1st January was Rs.8000. It has been decided by management that:

i. In the case of deficit of fund within the limit of Rs.10000, arrangement can be made with the Bank

ii. In the case of deficit of fund exceeding Rs. 10000 but within the limit of Rs.42000, issue of debentures is to be preferred.

iii. In the case of deficit of fund exceeding Rs.42000 issue of shares is to be preferred (considering the fact that it is within limit of Authorized Capital)