Self-test The following is a projection of income and expenditure from February to July 2009.

You are required to prepare a cash budget for Jetset Ltd for the 3 months ending 30 June 2009.

Cash sales Credit sales Purchases Feb 100,000 50,000 76,000 March 110,000 60,000 86,000 April 124,000 64,000 90,000 May 120,000 58,000 64,000 June 96,000 48,000 50,000 July 84,000 36,000 40,000 You are given the following additional information:

(i) Bank balance at 31 March 2009 is expected to be £15,000.

(ii) Payment for purchases is made in cash, two months later.

(iii) Payment for credit sales is received in cash, one month later.

(iv) Wages per month are estimated at £24,000.

(v) Overheads per month are estimated at £36,000.

(vi) Last instalment on a loan amounting to £70,000 must be paid in April.

(vii) VAT payment due in May. This amounts to £23,000.

(viii) Depreciation per month amounts to £13,000.

(ix) A tax rebate of £50,000 is due, to be paid in June.

You are required to list the action you would take if the resultant cash budget shows that there is a shortage of cash for the period under review. What action can be taken to prevent a deficit?