CASH BUDGET QUESTIONS

QUESTION 1

The following are the projected sales of Basty Enterprise forthe first half of 2018

N$

January 200,000

February 250,000

March 250,000

April 300,000

May 150,000

June 150,000

July 150,000

Additional Information

i. All sales are credit and on average 80% is collected in the month of sales and 15% in the next month; theremainder is uncollectable

ii. Overheads are N$ 60,000 a month and are paid as incurred

iii. Goods are purchased in anticipation of sales in the month preceding the month of sales. Sales are invoiced at cost plus 20%

iv. Supplies are paid one month after the good are received

v. General expenses are paid at N$ 15,000 each month

Required

a) A schedule of cash collection from customers for the period January to June

b) A cash budget for the period April to June 2018 assuming the cash balance as at 31st March 2018 was N$ 20,000