cash budget

ABC Plc produces and sells one product which it sells for K40 per unit. Units to be sold during the period 1st October 2018 to 31st May 2019 have been forecast as follows: ON D J F M A M Units to be sold 2,000 1,300 3,000 1,500 2,200 1,900 3,050 4,100- The company estimates that cash sales will be 65% of planned sales for every month. FB has analysed past sales and believes that credit sales will be collected as follows: 60% of the credit sales in the month following the month of sale. 40% of the credit sales in the second month following the month of sale FB is contemplating disposing of some old non-current assets in December 2018. The sales price is K125, 000 and will be paid in January 2019. Wages are paid in the month following the month in which sales take place. Each product unit sold requires 2 hours paid at the rate of K3.5 per hour. FB plans to purchase new non-current assets worth K175, 000 in February 2019 and will pay for these in the month following the month of purchase. Selling and distribution costs will be 20% of the total sales revenue for each month. The closing cash balance as at 30th November 2018 was K7, 200. Required Prepare a cash budget for the period December 2018 to May 2019 20 Marks