1. From the following information relating to CHNADRA Ltd, you are required to prepare a cash budget for the forthcoming 3 months viz., May, June and July. The management wishes to maintain a cash balance of Rs. 20 lakhs at all times. Determine whether borrowing will be necessary during the period and if so when and for how much. As of April 3011, the company had a bank balance of R520 lakhs. Actual sales (Rs. Forecasted sales In lakhs) (Rs. in lakhs) 0 20% of the sales are for cash. Credit Sales are collected as 50% in the month of sales and balance equally in subsequent two months (there is normally no bad debts). 0 Manufacturing cost of goods sold is 60% of sales. 10% of this cost is depreciation. Out of the balance 90%, 60% is paid in the previous month, 20% in the month of sales and 10% in the subsequent month. 0 Selling and Administrative Expenses are fixed Rs.4 lakhs per month plus 10% of manufacturing cost of goods sold. All these expenses are paid during the month of sale. 0 Interest payments: Half yearly interest payments on R5300 lakhs borrowings @ 18% per annum in January and July. 0 Dividends: Rs 10 lakhs dividend is expected to be declared and paid in July. 0 Capital expenditure: Rs.40 lakhs is expected to be invested in Plant and Machinery in June. 0 Income Tax payment of Rs.20 lakhs will be made in July