Draw up a cash budget for the months january to march 2010

Question

Draw up a cash budget for the months January to March 2010, from the following information:

1. Cash and bank balance on 1 January 2010 - Rs. 3,00,000
2. Actual and budgeted sales:

Actual: 2009:	September	Rs. 5,00,000
	October	Rs. 7,50,000
	November	Rs. 8,00,000
	December	Rs. 8,50,000
Budgeted: 2010:	January	Rs. 9,00,000
	February	Rs. 9,20,000
	March	Rs. 9,90,000

Purchases: Actual and Budgeted:

Actual: 2009:	November	5,50,000
Budgeted: 2010:	January	5,80,000
	February	5,00,000
	March	6,00,000

Wages and expenses: Actual and budgeted:

Actual: 2009:	November	Rs. 2,50,000 & Rs. 1,50,000
	December	Rs. 2,50,000 & Rs. 1,60,000
Budgeted 2010:	January	Rs. 2,80,000 & Rs. 1,60,000
	February	Rs. 2,80,000 & Rs. 1,80,000
March		Rs. 3,00,000 & Rs. 1,80,000

1. Special items:
   1. Advance payment of tax in March 2010 is Rs. 50,000.
   2. Plan to be acquired and paid in January 2010 is Rs. 1,00,000.
2. Assume 10% purchases and sales are on cash basis.
3. Lag in the payment of wages: 1/2 month; expenses: 1/4 month.
4. Period allowed by debtors: 2 months.
5. Period allowed by creditors: 1 month.