1. Cash Budget
Q-4. From the following budget data, forecast the cash position at the end of April, May
and June 2010.
Month Sales Purchases Wages Miscellaneous Exp.
February 120000 84000 10000 7000
March 130000 100000 12000 8000
April 80000 104000 8000 6000
May 116000 106000 10000 12000
June 88000 80000 8000 6000
Additional Information:
Sales: 20% realized in the month of Sales, discount allowed 2%. Balance realized equally
in two subsequent months.
Purchase: These are paid for in the month following the months of supply.
Wages: 25% paid in arrears following month.
Miscellaneous expenses- paid a month in arrears.
Rent: Rs.1000 per month paid quarterly in advance due in April.
Income tax: First installment of advance tax Rs. 25000 due on or before 15th June.
Income from investments: Rs.5000 received quarterly in April, July etc.
Cash in hand Rs.5000 on 1st April 2010.

2. Ans:
Particular April May June
Cash in hand as on 1.4.2010 5000 5680 (7084)
Add cash receipt:
Collection from debtors 115680 106736 95648
Income from investment 5000 -- --
Cash available (A) 125680 112416 88564
Less cash disbursement: (B)
Paid to creditors 100000 104000 106000
Wages 9000 9500 8500
Miscellaneous exp. 8000 6000 12000
Rent 3000 -- --
Income tax -- -- 25000
Closing cash in hand (A-B) 5680 (7084) (62936)

3. Work Out
1. Collection from debtor
Sales March April May June
Sales done in 48000 48000
February
Sales done in March 25480 52000 52000
Sales done in April 15680 32000 32000
Sales done in May 22736 46400
Sales done in June 17248
Total 73480 115680 106736 95648
How sale amount is being realized: sale of March- 130000
March- (130000*0.20)*0.98
26000*0.98 = 25480
And (130000-26000)/2 = 52000 in each April and May
2. Wages
March April May June
Wages of February 2500
Wages of March 9000 3000
Wages of April 6000 2000
Wages of May 7500 2500
Wages of June 6000
Total 11500 9000 9500 8500