HASF PVT.LTD
BUDGETED INCOME STATEMENT
FOR 1st QUARTER 1999
Description	JANUARY	FEBRUARY	MARCH
Sales	285,000	323,000	221,000
Purchases	129,000	168,000	95,000
Wages	35,000	37,000	30,000
Supplies	26,000	23,000	21,500
Utilities	6,500	8,700	7,200
Rent	15,000	12,800	13,600
Insurance	12,000	12,000	12,000
Advertising	24,500	28,500	18,000
Depreciation	20,000	20,000	20,000
Net Profit	17,000	13,000	3,700

Required:

1. Please make a cash budget for the months of January, February and March 1999 based on the data for: (5 Marks)

View Receivable Trend:

• 30% of Sales are collected in the month of sale
• 30% of Sales are collected after the month of sale
• 40% of Sales are collected two months after the sale is made

View Payable Trend:

• 10% of Purchases are paid for in the month of purchase
• 35% of Purchases are paid after the month of purchase
• 55% of Purchases are paid two months after the purchase is made

Additional Information:

• Rent and Insurance expense were prepaid at the end of 1998
• All other expenses are paid for in the month they were incurred
• November Sales = 195,000
• November Purchases = 100,000
• December Sales = 250,000
• December Purchases = 165,000
• Please see attached Budgeted Income Statement for 1st Quarter 1999

2. Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company (Word limit Max 150-200) (2 marks)