Q. 1

 Based on the following forecasts prepare a Cash Budget for the period Jan - April 2014:  

• Sales:
• Nov 16L | Dec 20L | Jan 20L | Feb 18L | Mar 24L | Apr 20L
• 20% Cash Sales, rest on credit - half of which is collected in next month & remaining in 2nd month
• Sales Commissions @5% paid in month next to sale on Credit Sales
• Purchases:
• Dec 8L | Jan - 12L | Feb - 12L | Mar - 10L | Apr - 14L
• Labour: month lag (50% paid in the current month, balance in next)
• Dec 2L | Jan -2L | Feb - 3L | Mar - 3L | Apr - 2L
• Overheads:
• Dec 1L | Jan - 1.5L | Feb - 1.2L | Mar - 1.8L | Apr - 1L
• Machinery Purchase:
• Jan - 12L; 20% Downpayment, 40% next month, 40% in next to next month
• Advance payment of Tax: Jan - 2L | Mar - 3L
• Company has a policy to maintain a minimum balance of Rs.1L. Excess or Shortage will be Invested or Borrowed. Ignore the interest.