Fancitoys Ltd is preparing its budgets for the quarter beginning 1 July. Stock on hand at the end of June is expected to be $72,000 and the balance at bank $10,000. In view of the pressure on liquid resources the directors have decided to reduce the stock level at the end of each month to an amount sufficient to cover the following two months' sales. Purchases are paid for by the end of the following month; the amount payable for June's purchases is $36,000.

Budgeted sales (which provide a gross profit of 331/3% on cost) are:

$ $

July 40,000 October 48,000

August 42,000 November 52,000

September 46,000 December 44,000

Ten per cent of the sales are for cash and of the credit sales two-thirds are paid for during the month after the sale and the remainder during the following month. Credit sales during May amounted to $24,600 and during June $26,100.

The annual rental for the company's premises is $18,000 payable monthly. Other payments to be made are:

July August September

$ $ $

Salaries, wages and commission 4,800 5,100 5,500

Rates 800

Other expenses 600 1,800 2,000

Required:

Prepare the company's cash budget for the quarter beginning 1 July, showing the balance at the end of each month and the total for the quarter.