F. Jack comes to see you in February 2020. He is full of enthusiasm for a new product that he is about to launch on to the market. Unfortunately, his nancial recklessness in the past has led him into being bankrupt twice, and he has only just been discharged by the court from his second bankruptcy. 'Look here, Amben,' he says, 'with my new idea I'll be a wealthy man before Christmas.' 'Calm down,' you say, 'and tell me all about it.' Jack's plans as far as cash is concerned for the next six months are:

(a) Opening cash (including bank) balance on 1 July 2020 3,600

(b) Production in units:

2020

2021

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

720

810

900

960

1,050

1,110

1,140

1,020

930

780

750

(c) Raw materials used in production cost 15 per unit. Of this, 90 per cent is paid in the month of production and 10 per cent in the month after production.

(d) Direct labour costs of 24 per unit are payable in the month of production.

(e) Variable expenses are 6 per unit, payable 40 per cent in the same month as production and 60 per cent in the month following production.

(f) Sales at 60 per unit:

2020

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

780

600

960

870

1,200

900

1,050

1,200

1,170

1,200

Debtors to pay their accounts three months after that in which sales are made.

(g) Fixed expenses of 1,200 per month payable each month.

(h) Machinery costing 6,000 to be paid for in September 2020. The machine has a useful life of 5 years and depreciation is computed using the reducing balance method.

(i) Will receive a legacy of 7,500 in November 2020 and will pay it into the business account.

(j) Drawings will be 900 per month.

You are required:

Draw up a cash budget for F. Jack showing the balance at the end of each month, from the above information for the six months ended 31 December 2020: