DeeSplay Ltd DeeSplay Ltd (DeeSplay) makes and sells frames for displaying vinyl LPs. In September the company approached its bank for a loan to help meet short term cash requirements. In order to assess the scale of the loan required, the loan manager at the bank has asked the company to prepare a cash budget for the three months of October to December. DeeSplay's management accountant has gathered the following information. The budgeted data per frame is as follows: Selling price Variable materials cost Variable labour cost Variable production overheads Variable selling expenses Additional information: 45 30 8543 Unit sales of frames are budgeted to be: September 800 October 900 November 700 December 600 January 1,000 Credit sales account for 80% of total sales. Credit customers are expected to pay in the month following sale for which there will be a discount of 2% given. One credit customer who bought 20 frames on 3 September was declared bankrupt on 27 September, with no prospect of being able to pay their creditors. DeeSplay also wishes to make a general provision for bad debts of 1,000 in October. Inventory levels will be such that production takes place the month before sale. Materials are purchased one month before production takes place. Suppliers of materials are paid two months after purchase. . DeeSplay has some obsolete materials in inventory which cost 1,200. These will be sold on one month's credit in October for 250. Labour costs are paid in the month in which they are incurred. All other expenses are paid in the month following that in which they are incurred. Fixed expenses incurred are 1,000 per month for the months of September and October and 1,500 per month for the months of November, December and January. All fixed expenses are paid in the month following that in which they are incurred. The fixed expenses include 200 for depreciation of buildings per month. The buildings were revalued by a surveyor in September and are worth 5,000 more than the net book value shown in September's accounts. This additional value is to be recorded in October's accounts. The company is also planning to purchase a new delivery vehicle costing 25,000, which will be paid in full in October. The estimated scrap value is 4,000 in 3 years' time. On 1 November, additional machinery will be purchased at a cost of 15,000 payable in three equal installments in November, December and January. The estimated scrap value is 1,000 in four years' time. Depreciation is calculated straight line per month and a full month's depreciation is charged in the month of purchase. The bank balance on 1 October is 5,000 in credit. Overdraft interest payments are estimated at 125 for November and 130 for December. Taxable profits for last year amounted to 3,500 and the tax on these at a rate of 17% is due to be paid on 31 October. Prepare the cash budget for each of the three months ending 31 December. You should make an entry in every box in the cash budget. Enter a zero or dash where applicable. Do not leave any boxes blank. October November December