PQR Co. wishes to arrange overdraft facilities with its bankers during the period April to June of a particular year, when it will be manufacturing mostly for stock.

Prepare a Cash Budget for the above period from the following data, indicating the extent of the bank facilities the company will require at the end of each month:

Month 2009 Sales (Rs.) Purchases (Rs.) Wages (Rs.)

February 1,80,000 1,24,800 12,000 March 1,92,000 1,44,000 14,000 April 1,08,000 2,43,000 11,000 May 1,74,000 2,46,000 10,000 June 1,26,000 2,68,000 15,000

(b) 50% of the credit sales are realised in the month following the sales and the remaining sales in the second month following. Creditors are paid in the following month of purchase.

(c) Cash at bank on 1st April (estimated) Rs. 25,000.

[Ans.: Balance in hand in April Rs. 56,000; Overdraft in May Rs. 47,000; Overdraft in June Rs. 1,20,000.]