353 IIIvo ----- | Gamma Delta 1. Units to be produced 20,000 25,000 2. Other manufacturing expenses 32,00.000 3,75,000 3. Per unit (2 = 1) 10 15 P.17.8 From the following particulars of Hypothetical Ltd, prepare a cash budget (tin lakh): May June July August Sept- Octo- Nov- Dece- Janu- ember ber ember mber ary 1. Sales (net of cash discounts) 10 10 20 30 40 20 20 10 10 2. Purchases 7 14 21 28 14 14 7 7 3. Wages and salaries 1.50 2 2.50 1.50 1.50 1 4. Rent 0.50 0.50 0.50 0.50 0.50 0.50 5. Other expenses 0.20 0.30 0.40 0.20 0.20 0.10 6. Taxes 4 4 7. Payment for plant construction 10 All sales are made on terms that allow a cash discount for payment within 20 days: if the discount is not taken, full payment may be made in 40 days. However, the experience has been that on 20 per cent of sales, payment is made during the month in which sales are made; on 70 per cent of the sales, payment is made during the second month and on the balance 10 per cent of sales, payment is made during the third month. Materials amount to 70 per cent of sales and are bought in the month before the fimm expects to sell the finished goods. Its purchase terms permit the company to delay payment for one month. The firm has to pay tax of 4 lakh on September 15 and on December 15. Assume the firm needs to keep a minimum cash balance of 35 lakh in hand at all times. It is assumed to have an opening cash balance of 6 lakh on July 1. Estimate the firm's requirements of cash for the period from July to December