➢Question on Cash Budgeting

On June 30, 2021, Agri-Autos limited have compiled the following data to prepare the cash budget
for the quarter ending 30/09/ 2021. The following information has been provided by the accountant:
Cash balance on June 30, 2021: ----------------------------------------------------------------- Rs 675,000

➢Receipts related data is as follows:

1. Company’s monthly Sales are expected to be made as follows:
June, 2021…………………………………………………………………… 1,060,000
July, 2021 ……………………………………………………………………. 1,155,000
August, 2021 …………………………………………………………………….. 1,230,000
September, 2021 ……………………………………………………….................... 1,260,000
The Company’s collections on sales are estimated to be as follows:
• Collections in the month of sale …………………………………………… 65%
• Collections in the next month of sale ………………………………………. 35%

2. Interest income is expected to be received in the month of August, 2020 260,000

➢Payments related data is as follows:

1. Company’s monthly purchases are expected to be as follows:
June, 2021 …………………………………………………………………… Rs 550,000
July, 2021 ……………………………………………………………………. 570,000
August, 2021 …………………………………………………………………….. 590,000
September, 2021 ……………………………………………………….................... 650,000
The Company’s payments on purchases are estimated to be as follows:
• Payments in the month of purchases ………………………………………………… 40%
• Payments in the next month of purchases …………………………………………. 60%
2. Salaries and wages and other benefits to be paid in each month –Fixed ………… Rs 350,000
3. Energy charges, other factory overheads. …………………………………………. 240,000
4. Administrative & selling expenses. Fixed. ……………………………………….. 150,000
5. Cash dividend to shareholders to be paid in July, 2021 approx …………………. 185,000
6. Income tax to be paid in August, 2021. Approx 225,000

Required:
Prepare the cash budget for July, August, and September, 2021, showing total receipts,
total payments, and cash ending balance - Moth wise and indicating total for the quarter
also.
…..… ………