Based on the following information, prepare a cash budget for ABC Ltd:

First quarter

(Rs)

Second quarter

(Rs)

Third quarter

(Rs)

Fourth quarter

(Rs)

Opening cash balance 10,000 Collection from customers 1,25,000 1,50,000 1,60,000 2,21,000 Payments Purchase of materials 20,000 35,000 35,000 54,200 Other expenses 25,000 20,000 20,000 17,000 Salary and wages 90,000 95,000 95,000 1,09,200 Income tax 5,000 — — —

Purchase of machinery — — — 20,000 The company desires to maintain a cash balance of Rs 15,000 at the end of each quarter. Cash can be borrowed or repaid in multiples of Rs 500 at an interest of 10% per annum. Management does not want to borrow more cash than what is necessary and wants to repay the amount as early as possible. In any event, loans cannot be extended beyond four quarters. Interest is computed and paid when the principal is repaid. Assume that borrowings take place at the beginning and repayments are made at the end of the quarters.