Trial Question number 3.

Ukraine steel companyis in the process of preparing the Cash Budget for the last four months of 2020 that is September to December. The following information has been made available.

Sept. Oct. Nov. Dec.

1. Projected Sales (Units)12,000 13,000 13,000 14,000
2. Selling Price is GHS5 per unit but it is expected to drop by 5% from 1st November.
3. Receipt for goods sold is as follows; 20% in the month of sales, 60% the following month after sales and the balance in the second month after sales. Bad debt is estimated at 5% of sales values.
4. Purchases of goods at GHS3.00 per unit per month are as follows: September 14,000 units, October 14,000 units, November 14,400 units and December 13,000 units.
5. Goods purchased are paid one month in arrears.
6. Monthly expenses estimated at 24% on sales revenue are paid in the month in which the expense is incurred.
7. The company plans to buy a delivery van at a cost of GHS54,000.00. 40% of the cost is to be paid in October and balance in January 2018.
8. The Director withdraws GHS6,000.00 monthly for personal expenses.
9. Extracts from August figures are as follows:

• Trade receivable of GHS92,000.00 out of which GHS20,000.00 is part of July sales before the bad debt.
• Creditors for goods GHS20,000.00
• Cash GHS7,000.00.

Required:

1. Prepare the monthly CASH BUDGET for the four months ending December, 2020.