Question No. 05 The Sitara Industries is in the process of preparing a cash budget for the next three months period. The following information was collected from the accounting records:- a) All sales are on credit basis. Sixty percent of sales are collected in the month of sale while thirty seven percent are collected in the following month. The remaining three percent are bad debts. b) The balance sheet as at 30 June, 2021 indicates a cash balance of Rs. 60,000, Accounts Receivables Rs. 165,000 and Accounts Payable at Rs. 70,000. c) The management has estimated that 50% of the accounts receivable could be recovered during July, 2021 while 47% during August, 2021 while the balance would be irrecoverable. d) The purchase of merchandise is paid at 70% in the month of purchase while the 30% would be paid next month of acquisition. e) The accounts payable as on 30 June, 2021 would be paid during July, 2021. f) The company has a policy to maintain a minimum cash balance of Rs. 60,000 at each month end. The company has an approved borrowing ceiling with the bank. Such financing is in the multiples of Rs. 1,000 with 10% per annum interest. The borrowings would be utilized at the beginning of the month and repaid at the end of the month. The interest would be paid when the loan would be repaid. g) The following data relating to sales, purchase of merchandise, operating expenses etc are projected by the budget committee for the next three months period of 2021 Particulars July, 2021 August, 2021 September. 2021 Sales Rs. 450,000 540,000 555,000 Purchases Rs. 270,000 300,000 420,000 Operating expenses Rs. 113,000 92,000 155,000 Proceeds from scrap 10,000 Dividend payment 150,000 h) The operating expenses also include an amount of Rs. 20,000 each month for depreciation. Required: 1) Prepare a schedule of cash collection budget for each of the above three months period and for the quarter year of 2021. 2) Prepare a schedule of cash disbursement budget for each of the above three months period and for the quarter year of 2021. 3) Prepare a consolidated cash budget on monthly basis and for the quarter year indicating the financing and its repayment with interest and the closing balance. The loan repayment and interest is to be paid only if sufficient funds are available