The following information relates to Mansel Ltd, a publishing company. The selling price of a book is 15, and sales are made on credit through a book club and invoiced on the last day of the month. Variable costs of production per book are materials (5), labour (4), and overhead (2). The sales manager has forecast the following volumes:

Nov Dec Jan Feb Mar Apr May Jun Jul Aug

No of books: 1,000 1,000 1,000 1,250 1,500 2,000 1,900 2,200 2,200 2,300

Customers are expected to pay as follows:

One month after the sale 40%

Two months after the sale 60%

The company produces the books two months before they are sold and the creditors for materials are paid two months after production.

Variable overheads are paid in the month following production and are expected to increase by 25 per cent in April; 75 per cent of wages are paid in the month of production and 25 per cent in the following month. A wage increase of 12.5 per cent will take place on 1 March.

The company is going through a restructuring and will sell one of its freehold properties in May for 25,000, but it is also planning to buy a new printing press in May for 10,000. Depreciation is currently 1,000 per month, and will rise to 1,500 after the purchase of the new machine.

The companys corporation tax (of 10,000) is due for payment in March. The company presently has a cash balance at bank on 31 December 1999, of 1,500.

Required :

Produce a cash budget for the six months from 1 January 2000 to 30 June 2000. (12 marks)