month 6,000 6,000 7.200 12,480 12.000 18.000 30% in next to next Creditors 30% of sales of the next month Creditor previous month of sales 30% 52,000 50,000 75,000 90,000 35.000 15,600 15,000 22,500 27,000 10.500 1% of sales of the respective months Sales commission 300 520 | 50 | 750 900 Commission Sales 350 j30 Illustration 5: Microsoft Ltd. Wants you to prepare the cash budget of the company for the three months, April to June 2011. You are given the following information: 1) Operation 2011 Sales Purchases Rs. Wages Other Rs. Rs. Rs. April 60,000 20,000 15,000 10,000 May 50,000 20,000 15,000 10,000 June 80,0000 40,000 15,000 15,000 July 1,00,000 50,000 25,000 20,000 August 1,40,000 70,000 25,000 20,000 September 1,60,000 60,000 30,000 20,000 2) Sales are 20% cash and the balance at two months credit; purchases are at one months credit; subject to a cash discount of 5%. 3) Wages are paid 12 month in arrear and other expenses are paid one month in arrear. 4) During August the company pays a dividend of 15% on its equity capital of Rs. 2,00,000 and during September deferred payment installment (quarterly) of Rs. 25,000 will fall due. 5) It is expected that at the end of the June 2009 there will be cash balance of Rs. 14.000. Prepare the cash budget as requested by the company