Lecture example - CASH BUDGETS It is mid-June and Warne Limited is finalising the budget for the next quarter. The following information has been drawn from the planning exercise so far: Sales July June (forecast) 12,500 13,600 August 17,000 September 16,800 Direct wages 1,300 per month increasing by 5% in September Direct material purchases June (forecast) 3,450 July 3,780 August 2,890 September 3,150 ust Warne sells 10 per cent of its goods for cash. The remainder of customers receive one month's credit. Payments to suppliers are made in the month following purchase. Wages are paid as they are incurred. Warne takes one month's credit on all overheads: O Production overheads are 3,200 per month. O Selling, distribution and administration overheads amount to 1,890 per month. Warne expects to purchase a delivery vehicle in August for a cash payment of 9,870. The cash balance at the end of June is forecast to be 1,235. Required: (1) Prepare a cash budget for each of the months July to September (ii) Comment on the results