Intermediate: Preparation of functions budgets, cash budget and master budget The budgeted balance sheet data of Kwan Tong Umbago Ltd is as follows:

The estimates for the next four-month period are as follows:

The company intends to sell each unit for £219 and has estimated that it will have to pay £45 per unit for raw materials. One unit of raw material is needed for each unit of finished product.
All sales and purchases of raw materials are on credit. Debtors are allowed two months’ credit and suppliers of raw materials are paid after one month’s credit. The wages, variable overheads and fixed overheads are paid in the month in which they are incurred.
Cash from a loan secured on the land and buildings of £120000 at an interest rate of 7.5% is due to be received on 1 May. Machinery costing £112 000 will be received in May and paid for in June. The loan interest is payable half yearly from September onwards. An interim dividend to 31 March of £12 500 will be paid in June.
Depreciation for the four months, including that on the new machinery is:

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Fixed assets Land and buildings Machinery and equipment 1 March Depreciation Cost to date Net () () () 500 000 500 000 124 000 84 500 39 500