1. Cost & Management Accounting
Lecture-38

2. Cash Budget

3. XYZ Ltd Cash Budget For the month of Jan-March
Jan Feb March
Opening balance
Add Receipts (Anticipated cash
receipt from all sources)
Less Payments (Anticipated utilization
of cash)
Excess / Deficit
Bank barrowing / Overdraft
Closing balance

4. Simple Cash Budget – Question
D.A corporation has a following information relating to the month of January:
Opening cash balance Rs. 20,000. Cash receipts are: Credit sales Rs. 1,40,000, Cash sales Rs. 80,000, Loan Rs. 2,00,000, Disposal of machine Rs. 60,000, Further capital Rs. 1,20,000.
Cash payments are: Payment to creditor Rs. 60,000, Cash purchase Rs. 60,000, machine purchase Rs. 3,50,000, Administrative expenses Rs. 40,000, Selling expenses Rs. 75,000 and Interest on loan Rs. 5,000

5. XYZ Ltd Cash Budget For the month of Jan
Opening balance ,000
Add Receipts
Receipt from sales:
Credit sales ,40,000
Cash sales ,000
Loan ,00,000
Further capital ,20,000
Disposal of machine ,000
6,00,000
6,20,000
Less Payments
Purchases:
Payment to creditor 60,000
Cash purchase ,000

6. Administrative expenses 40,000 Selling expenses 75,000
Machine purchase 3,50,000
Administrative expenses ,000
Selling expenses ,000
Interest on loan ,000
5,90,000
Closing balance ,000
Carry on from previous slide

7. Complex Cash Budget-Problem
Month
Sales
Jan
2,00,000
Feb
2,20,000
Mar
3,00,000
Apr
2,50,000
May
2,80,000
June
First all months will appear.
Second value of sales will appear one by one
20 % of the goods will be sold on cash. 40% of the rest of the sales will be recovered in the month of sales. 30% will be recovered in the second month and balance will recovered in third month.
Calculate cash received from sale during 2nd quarter

8. March
Cash sales = 3,00,000 x 20% = 60,000
Credit sales = 3,00,000 x 80% = 2,40,000
Recovered in March = 2,40,000 x 40% = 96,000
Recovered in April = 2,40,000 x 30% = 72,000
Recovered in May = 2,40,000 x 30% = 72,000

9. February Cash sales = 2,20,000 x 20% = 44,000
Credit sales = 2,20,000 x 80% = 1,76,000
Recovered in Feb = 1,76,000 x 40% = 70,400
Recovered in Mar = 1,76,000 x 30% = 52,800
Recovered in Apr = 1,76,000 x 30% = 52,800

10. April
Cash sales = 2,50,000 x 20% = 50,000
Credit sales = 2,50,000 x 80% = 2,00,000
Recovered in April = 2,00,000 x 40% = 80,000
Recovered in May = 2,00,000 x 30% = 60,000
Recovered in June = 2,00,000 x 30% = 60,000

11. May
Cash sales = 2,80,000 x 20% = 56,000
Credit sales = 2,80,000 x 80% = 2,24,000
Recovered in May = 2,24,000 x 40% = 89,600
Recovered in June = 2,24,000 x 30% = 67,200

12. June
Cash sales = 3,00,000 x 20% = 60,000
Credit sales = 3,00,000 x 80% = 2,40,000
Recovered in June = 2,40,000 x 40% = 96,000

13. Solution Months Sales April May June Jan 2,00,000 ---- Feb 2,20,000
52,800
Mar
3,00,000
72,000
Apr
2,50,000
50,000
80,000
60,000
2,80,000
56,000
89,600
67,200
96,000
Total
2,54,800
2,77,600
2,83,200
First individual month with sales value will appear
Secondly April will come one by one as a row vise
Than march as a row wise and so on