John Rees has the following information for the six months 1 July to 31 December.

(a) Opening cash balance 1 July £8,600

(b) Sales at £25 per unit:

Trade receivables will be paid two months after the customers have bought the goods.

(c) Production in units:

(d) Raw materials costing £10 per unit are delivered in the month of production and will be paid for three months after the goods are used in production.

(e) Direct labour of £6 per unit will be payable in the same month as production.

(f) Other variable production expenses will be £6 per unit. Two-thirds of this cost will be paid for in the same month as production and one-third in the month following production.

(g) Other expenses of £200 per month will be paid one month in arrears. These expenses have been at this rate for the past two years.

(h) A machine will be bought and paid for in September for £8,000.

(i) John Rees plans to borrow £4,500 from a relative in December. This will be banked immediately.

Required:

Prepare John Rees’s cash budget from 1 July to 31 December.

April May June July Units 100 130 150 180 Aug. Sept. Oct. 200 210 220 Nov. Dec. 240 280