David Llewelyn has been advised by his bank manager that he ought to provide a forecast of his cash position at the end of each month. This is to ensure that his cash inputs will be sufficient to allow a bank loan to be repaid when due and to check that his outgoings are properly controlled. It is estimated that at 30 June 20X0 his current account will be £5,000 in credit, whereas the amount owing in respect of the bank loan taken out on 1 July 20X5 will be £15,000. Monthly deductions from the current account balance amount to £242 including interest charges on account of this loan. In addition to these outgoings, David has to allow for the following:

(i) The payment of wages of £2,000 per month.

(ii) Personal drawings of £500 per month.

(iii) On average David earns a margin of 15 per cent (of sales) and expects to sell stocks purchased in the previous month. Of the sales in any one month, 20 per cent are paid for within that month, 70 per cent the following month and the remainder two months after sale. Other receipts from debtors are expected to be £40,000 in July 20X0, £32,000 in August 20X0 and £4,000 in September 20X0.

(iv) Purchases of supplies will amount to £38,250 per month from July 20X0 payable one month in arrears. In addition, purchases of £7,500 to increase stocks will be delivered in September 20X0 and must be paid for in October 20X0. Creditors of £34,000 for purchases made in June 20X0 are to be paid in July 20X0.

(v) Monthly payments to the Inland Revenue for the taxation of his employees’ earnings will amount to £500 per month.

(vi) Rent which has to be paid quarterly in advance amounts to £5,000 per annum. These payments commenced in January 20X0.

(vii) Business rates are to be paid in two instalments as due in October 20X0 and in March 20X1. This estimated expenditure will amount to £4,500 per annum.

(viii) Payment of Value Added Tax to H.M. Customs and Excise of £5,000 in July 20X0 and every third month thereafter (but see also (ix)).

(ix) David intends to purchase a van for £8,150 in August 20X0. He will then be entitled to deduct £1,050 from the VAT payment due to H.M. Customs and Excise in October 20X0.

Required:

A forecast cash flow statement in columnar form showing the estimated current account balance at the close of each of the four months ending 31 October 20X0.