Sudozee Ltd Cash Budget

The monthly forecast of the income and expenditure of Sudozee Ltd is given below:

You may assume the following:

1. Suppliers of materials are paid on average a month after delivery of goods.
2. Factory expenses are paid in the month that they are incurred.
3. Rent and Rates are paid quarterly on the first day of January, April, July and October.
4. Clerical wages and expenses are paid in the month in which they occur.
5. Advertising and Stationary is paid monthly taking one months credit.
6. The lag in the payment of wages is one week (assume 4 weeks per month).
7. Salesmens commission is paid one month in arrears.
8. Sales income is split 50:50 as to cash and credit. On average, debtors take two months credit.
9. The cash balance on July 1 is 42,000.
10. In October new plant will be purchased for 38,000. Government grants on this plant will be received in November amounting to 6,000.
11. Corporation tax of 6,000 is to be paid in October.
12. a. Materials used in June were 40,000.

b. Advertising and stationary in June amounted to 12,000.

c. Wages in June amounted to 30,000.

d. Salesmens commission earned in June amounted to 4,000.

e. Sales income was 80,000 in both May and June.

f. Raw material stocks at the end of May amounted to 60,000 similar to those on hand at the end of June.

13. The taxation provision for the 6 months can be taken at 40,000 payable in full in December of next year.

Requirement:

Prepare a Cash Budget for the 6 months to 31^st of December

Materials Used Depr of Plant Factory Expenses Rent & Rates Office Expenses Advertising & Stationary Wages Sales Commission July Aug Sept Oct Nov Dec (000s) (000s) (000s) (000s) (000s) (000s) 40 50 60 80 100 90 8 8 8 8 8 8 10 10 10 10 10 10 2 2 2 2 2 2 28 28 28 28 28 28 14 16 10 12 20 14 30 40 30 304040 6 7 8 10 12 9 138 161 156 180 220 201 120 140 160 240 280 250 70 80 90 100 80 60 Sales Income Raw Materials Stock @ end of month