Juliet Miles has savings of £10,000 and she has decided to open a retailing business . The predicted sales and purchases for the first six months are

She predicts that 10% of the sales will be for cash and the remaining 90% will be paid in the month following the month of sales. Purchases must be paid for in the month in wh ich they occur. Rent of the shop will be £12,000 per annum payable quarte rly in advance. Wages will be £500 payable each month. The electricity charge will be £1,000 payable at the end of each quarter . Telephone and postage charges will be £2,000 payable at the end of each quarter.
Construct a cash budget.

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Sales Purchases January February March 15,000 8,000 15,000 8,000 15,000 10,000 April 20,000 10,000 May 20,000 12,000 June 20,000 12,000