Preparation of cash budget forecast profit and loss account and balance sheet for a limited company.

Courante Ltd.'s balance sheet at 31 December 19-1 is as follows:

Fixed AssetsCostDep.Net

Freehold premises20000400016000

Plant and machinery150009000 6000

350001300022000

Current Assets

Stock12000

Trade debtors17000

Cash at bank9500

Administration expenses prepaid2400

40900

Less: Current Liabilities

Trade creditors9000

Selling and distribution expenses accrued12001020030700

52700

Less: Long term liabilities 12% Debentures10000

42700

Share Capital and reserves

Ordinary share of 125000

General Reserve15000

Retained Earnings2700

42700

Sale and purchases for the four months to 30 April 19-2 are as follows:

JanFebMarApr

Sales25000280003000033000

Purchases1000080001200015000

It is expected that 40% of sales will be for cash, one month's credit is allowed to debtors.

One month's credit is allowed on all purchases.

Additional information:

1.Selling and distribution expenses: 10% of sales, payable in following month.

2.Administration expenses: 8000 per month. Prepaid administration expenses at 30 April 19-2: 1300.

3.Stock at 30 April 19-2: 9000.

4.Additional machinery will be purchased on 1 March 19-2 at a cost of 24000.

5.Provision is made yearly for depreciation as follows: freehold premises: 3% on cost, plant and machinery 20% on cost. 50% of all depreciation is charged to selling and distribution expenses and the balance to administration expenses.

6.Debenture interest is payable on 30 June and 31 December.

7.Payment of an interim dividend of 10p a share will be made in April 19-2.

8.It is planned to transfer a further 10000 to general reserve at 30 April 19-2.

Required

a.A cash budget for Courante Ltd. For the four months to 30 April 19-2.

b.A forecast profit and loss account for the four months to 30 April 19-2 and a forecast balance sheet as at that date.