The following budgeted income statement has been prepared for XY Company for the months of January to April 2020:

Jan Feb Mar April

Le000 Le000 Le000 Le000

Sales 60.0 50.0 70.0 60.0

Costs of production 50.0 55.0 32.5 50.0

(increase)/decrease in inventory (5.0) (17.5) 20.0 (5.0)

Costs of sales 45.0 37.5 52.5 45.0

Gross profit 15.0 12.5 17.5 15.0

Administration and selling over-head (8.0) (7.5) (8.5) (8.0)

7.0 5.0 9.0 7.0

Additional information:

40% of the production costs relates to direct materials. Materials are bought in the month prior to the month in which they are used. Purchases are paid for one month after purchase.

30% of the production cost relates to direct labour which is paid for when it is used.

The remainder of the production cost is production overhead.

Le 5,000 per month is a fixed cost which includes Le 3,000 depreciation. Fixed production overhead costs are paid for when incurred.

The remaining overhead is variable. The variable production overhead is paid 40% in the month of usage and the balance, one month later. Unpaid variable production overhead at the beginning of January is Le 9,000.

The administration and selling costs are paid quarterly in advance on 1st January, 1st April, 1st July and 1st October. The amount payable is Le 15,000 per quarter.

All sales are on credit. 20% of receivables are expected to be paid in the month of sale and 80% in the month following. Unpaid trade receivables at the beginning of January were Le 44,000.

The Company intends to purchase capital equipment costing Le 30,000 in February which will be payable in March.

The bank balance on 1st January 2020 is expected to be Le 5,000 overdrawn.

You are required to prepare the Cash budget for the first quarter of 2020.