You are in charge of making forecasts and preparing budgets. You have been supplied with cost and revenue forecasts and details of payment as follows:

1. Forecast of revenue and costs for the quarter ending 31 March 2001

JanuaryFebruaryMarch

Shs.Shs.Shs.

Direct

Materials (purchases)112,000100,000135,000

Wages90,00080,000100,000

Overhead

Production34,00032,00040,000

Administration22,00020,00027,000

Selling and distribution13,00011,00018,000

Sales360,000350,000440,000

2. Forecast of revenue and costs for the quarter ending 30 June 2001

AprilMayJune

Sh.Sh.Sh.

Direct

Materials (purchases)90,00067,00079,000

Wages72,00054,00063,000

Overhead

Production45,00036,00040,000

Administration22,00025,00027,000

Selling and distribution13,00011,00016,000

Sales350,000360,000360,000

Cash balance on 1 April 2001Sh. 90,000

Other details

Period of credit allowed by suppliers averages two months.

Debenture to the value of Shs. 125,000 are being issued in May 2001 and the amount is expected to be received during the month.

A new machine is being installed at the end of March 2001 at a cost of Sh 150,000 and payment is promised in early May 2001.

Sales commission of 3% is payable within one month of sales.

A dividend of Sh 100,000 is to be paid in June 2001.

There is a delay of one month in the payment of overheads. There is also a delay in payment of wages averaging a quarter of a month.

Twenty per cent of the debtors pay cash, receiving a cash discount of 4% and 70% of debtors pay within one month and receive a cash discount of 2 %. The other debtors pay within two months.

Required:

A cash budget on a monthly basis from the second quarter of the year 2001.