David Llewelyn has been advised by his bank manager that he ought to provide a forecast of his cash position at the end of each month. This is to ensure that his cash inputs will be sufficient to allow a bank loan to be repaid when due and to check that his outgoings are properly controlled. It is estimated that at 30 June \(19 \mathrm{X} 0\) his current account will be \(£ 5,000\) in credit, whereas the amount owing in respect of the bank loan taken out on 1 July 19 X 5 will be \(£ 15,000\). Monthly deductions from the current account balance amount to \(£ 242\) including interest charges on account of this loan. In addition to these outgoings, David has to allow for the following:

(i) The payment of wages of \(£ 2,000\) per month.

(ii) Personal drawings of \(£ 500\) per month.

(iii) On average David earns a margin of 15 per cent (of sales) and expects to sell stocks purchased in the previous month. Of the sales in any one month, 20 per cent are paid for within that month, 70 per cent the following month and the remainder two months after sale.

Other receipts from debtors are expected to be \(£ 40,000\) in July \(19 \mathrm{X} 0, £ 32,000\) in August \(19 \times 0\) and \(£ 4,000\) in September \(19 \times 0\).

(iv) Purchases of supplies will amount to \(£ 38,250\) per month from July \(19 \mathrm{X} 0\) payable one month in arrears. In addition, purchases of \(£ 7,500\) to increase stocks will be delivered in September \(19 \mathrm{X} 0\) and must be paid for in October 19X0. Creditors of \(£ 34,000\) for purchases made in June \(19 \times 0\) are to be paid in July \(19 \times 0\).

(v) Monthly payments to the Inland Revenue for the taxation of his employees' earnings will amount to \(£ 500\) per month.

(vi) Rent which has to be paid quarterly in advance amounts to \(£ 5,000\) per annum. These payments commenced in January \(19 \mathrm{X} 0\).

(vii) Business rates are to be paid in two instalments as due in October 19X0 and in March 19X1. This estimated expenditure will amount to \(£ 4,500\) per annum.

(viii) Payment of Value Added Tax to H.M. Customs and Excise of \(£ 5,000\) in July 19 X0 and every third month thereafter (but see also \((i x)\) ).

(ix) David intends to purchase a van for \(£ 8,150\) in August \(19 \times 0\). He will then be entitled to deduct \(£ 1,050\) from the VAT payment due to H.M. Customs and Excise in October 19X0.

Required

A forecast cash flow statement in columnar form showing the estimated current account balance at the close of each of the four months ending 31 October 19X0.