1 Abc Company Wishes To Arrange For Overdraft Facilities With Its Bankers During The 2819869

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1.ABC company wishes to arrange for overdraft facilities with its bankers during the period from April1 to June 30, 2018 when it will be manufacturing mostly for stock. Prepare Cash Budget for the above period from the following data, indicating the extent of Bank facilities, the company will require at the end of each month. a. Sales Purchases Wages $ $ $ February2,00,000 2,50,000 10,000 March2,20,000 2,80,000 11,000 April2,50,000 3,00,000 12,000 May3,00,000 3,40,000 13,000 June2,80,000 3,20,000 12,000 Document Preview:

ABC company wishes to arrange for overdraft facilities with its bankers during the period from April1 to June 30, 2018 when it will be manufacturing mostly for stock. Prepare Cash Budget for the above period from the following data, indicating the extent of Bank facilities, the company will require at the end of each month. Sales Purchases Wages $ $ $February2,00,000 2,50,000 10,000March2,20,000 2,80,000 11,000April2,50,000 3,00,000 12,000May3,00,000 3,40,000 13,000June2,80,000 3,20,000 12,000 10% of the sales are on cash basis. 50% of the remaining sales are realized in the month following the sales and the remaining 50% in the second month following. 5% sales commission is to be paid within the month following actual sales. Creditors are paid in the month following the month of purchases. Time lag in payment of wages 0.5 month. 12% Bonds of the face value of $1,00,000 were purchased on Jan. 1, 2018 on which interest is received monthly. Salaries to office staff is payable $5,000 p.m. Office rent is $3,000 p.m. Advance tax of $6,000 will be paid on June 15, 2018. Cash in hand on 1April, 2018 $1,20,000.

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cash-budget-q….docx

 
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