A company has a cash balance of £27,000 at the beginning of March and you are required to prepare a cash budget for March, April and May having regard to the following information.

Creditors give 1 month credit Salaries are paid in the current month Fixed costs are paid one month in arrears and include a charge for depreciation of

£5,000 per month.

Credit sales are settled as follows: 40% in month of sale, 45 % in next month and 12 % in the following month. The balance represents bad debts.

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Month Cash Sales Credit Sales Purchases Salaries Fixed Overheads Jan 74,000 55,200 9,000 30,000 Feb 82,000 61,200 9,000 30,000 March 20,000 80,000 60,000 9,500 30,000 April 22,000 90,000 69,000 9,500 32,000 May 25,000 100,000 75,000 10,000 32,000