Self-test The following estimates are made for Outdoor Shopping:

Sales Purchases Wages and salaries Jan 80,000 30,000 12,000 Feb 100,000 40,000 12,000 Mar 50,000 10,000 10,000 Apr 40,000 60,000 14,000 May 40,000 10,000 18,000 June 60,000 30,000 18,000 Jul 50,000 20,000 14,000 Aug 40,000 15,000 10,000 Sept 60,000 40,000 12,000 The following information is available:

(i) 20 per cent of all sales are cash sales and the remainder are credit sales.

(ii) The payments from debtors are:

(a) 60 per cent of the amount due is made within one month after the sale, and

(b) the balance due in the second month.

(iii) Purchases are paid for in the following month.

(iv) Interest on a loan of £480,000 is paid quarterly. The interest rate is 10 per cent and the first quarter’s payment is made in April 2010.

(v) Rent is £2,800 per month.

(vi) Monthly depreciation is calculated at £8,500.

(vii) Outdoor Shopping purchased new office equipment for a total price of

£28,000. Payment is to be made in two equal instalments, in May and September 2010.

(viii) The opening cash balance is £5,900.

You are required to prepare a cash budget for Outdoor Shopping for the period March to August 2010.