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Monthly Cash Budget for Dec 2019

The document provides information to prepare a monthly cash budget for three months ending December 31, 2019. It includes details of estimated monthly sales, expenses for materials, wages, production, selling and administration. It also provides information on capital expenditures, dividends, tax payments and opening cash balance. The summary prepared a cash budget for October, November and December 2019 showing estimated monthly cash receipts from sales and other sources, payments for expenses, and ending monthly cash balances.

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Shruti Maheshwari
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59 views4 pages

Monthly Cash Budget for Dec 2019

The document provides information to prepare a monthly cash budget for three months ending December 31, 2019. It includes details of estimated monthly sales, expenses for materials, wages, production, selling and administration. It also provides information on capital expenditures, dividends, tax payments and opening cash balance. The summary prepared a cash budget for October, November and December 2019 showing estimated monthly cash receipts from sales and other sources, payments for expenses, and ending monthly cash balances.

Uploaded by

Shruti Maheshwari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

From the following information, prepare a monthly cash budget for the three

months ending 31st December 2019.

Admin
Material Wage Productio .
Mont Sales
s s n Selling
h ($)
($) ($) ($) , etc
($)

3,00
Jun. 1,800 650 225 160
0

3,25
Jul. 2,000 750 225 160
0

3,50
Aug. 2,400 750 250 175
0

3,75
Sep. 2,250 750 300 175
0

4,00
Oct. 2,300 800 300 200
0

4,25
Nov. 2,500 900 350 200
0

4,50
Dec. 2,600 1,000 350 225
0

The credit terms are as follows:

 Sales — 3 months to debtors. 10% of sales are in cash. On average, 50%


of credit sales are paid on the due dates, while the other 50% are paid
in the next month.
 Creditors for material — 2 months.

The lag in payment for wages is 1/4 month and 1/2 month for overheads.

The cash and bank balance on 1st October is expected to be $1,500.

Other information is given as follows:

 Plant and machinery are to be installed in August at a cost of $24,000.


This sum will be paid in monthly installments of $500 each from 1st
October.

 Preference share dividends @ 5% on $50,000 are to be paid on 1st


December.

 Calls on 250 equity shares @ $2 per share are expected on 1st


November.

 Dividends from investments amounting to $250 are expected on 31st


December.

 Income tax (advance) is to be paid in December $500


 Solution

Cash Budget for Three Months Ending 31 Dec. 2019

Details: Oct. ($) Nov. ($) Dec. ($)

Balance b/d 1,500.00 537.50 350.00

Receipts
(estimated):

Sales 3,212.50 3,462.50 3,712.50

Capital - 500.00 -
Dividends - - 250.00

Total (A) 4,712.50 4,500 4,312.50

Payments:

Creditors 2,400.00 2,250.00 2,300.00

Wages 787.50 875.00 975.00

Overheads:

Production 300.00 325.00 350.00

Adm. S. & D. 187.50 200.00 212.50

Pref. Dividend - - 2,500.00

Income tax - - 500.00

Plant and Machinery


5,00.00 5,00.00 5,00.00
(500 each)

Total (B) Year 4,175.00 4,150.00 7,337.50

Balance c/d (A - B) 537.50 350 (-3,025)


 Calculation of Amount of Sales

Sale December
Month Oct. ($) Nov. ($)
($) ($)

Jun. 3,000 1,350.00 - -

Jul. 3,250 1,462.50 1,462.50 -

Aug. 3,500 - 1,575.00 1,575.00


Sep. 3,750 - - 1,687.50

Oct. 4,000 400.00 - -

Nov. 4,250 - 4,250 -

Dec. 4,500 - - 450.00

Total - 3,212.50 3,462.50 3,712.50


 Calculation of Wages
 1/4 wages for September and 3/4 wages for October. Therefore, the
calculation is:
 (1/4 x 750) = 187.50
 3/4 x 800 = 600
 Total = 787.50
 The wages for the other months can be calculated using the same
approach.

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