The following information related to the proposed budget for KASEE Ltd for the months ending 30 June 2014.
Material Production Administration Month Purchases Wages
Sales Overheads Overheads
Sh. '000' Sh. '000' Sh. '000' Sh. '000' Sh. '000'
January 72000 25000 10000 6000 5500
February 97000 31000 12100 6300 6700
March 86000 25500 10600 6000 7500
April 88600 30600 25000 6500 8900
May 102500 37000 22000 8000 11000
June 108700 38800 23000 18200 11500
1. Depreciation expenses are expected to be 0.5%of sales.
2. Expected cash balance in hand on 1 January 2014 is Sh. 72,500,000
3. 50% of total sales are cash sales
4. Assets are to be acquired in the months of February and April at Sh. 8,000,000 and Sh. 25,000,000 respectively
5. An application has been made to the bank for the grant of a loan of Sh. 30,000,00 and it is hoped that it will be received in the month of May
6. It is anticipated that a dividend of Sh. 35,000,000 will be paid in June
7. Debtors are allowed one month's credit
8. Creditors, production Overheads and administration overheads are paid after one month
9. Sales commission at 3% on sales is paid to the salesmen each month 10. All purchases are on credit
Required: A cash budget for the six months ending 30 June 2014