Solution:
M/s Novan Television Company
Cash Budget for six months, January to June, 2014
January February March April May June
` ` ` ` ` `
Receipts:
Cash sales 1,50,000 2,00,000 2,00,000 3,00,000 2,50,000 2,00,000
Collections from debtors 11,25,000 7,35,000 6,15,000 5,85,000 7,80,000 7,80,000
Total Receipts (A) 12,75,000 9,35,000 8,15,000 8,85,000 10,30,000 9,80,000
Payments:
Purchases 6,40,000 6,40,000 9,60,000 8,00,000 6,40,000 9,60,000
Rent 8,000 8,000 8,000 8,000 8,000 8,000
Wages and Salaries 1,20,000 1,60,000 2,00,000 2,00,000 1,60,000 1,40,000
Excise Deposit 2,00,000
Capital Expenditure 1,20,000
Interest 30,000 30,000
Total Payment (B) 7,68,000 8,08,000 11,98,000 12,08,000 8,08,000 12,58,000
Balance:
Net Cash Receipts (A - B) 5,07,000 1,27,000 (3,83,000) (3,23,000) 2,22,000 (2,78,000)
Cash balance at the beginning
of the month 4,00,000 9,07,000 10,34,000 6,51,000 4,00,000 5,50,000
Total 9,07,000 10,34,000 6,51,000 3,28,000 6,22,000 2,72,000
Borrowing/(Surplus) 72,000 (72,000) 1,28,000
Cash balance at the close _______ ________ _______ _______ _______ _______
of the month 9,07,000 10,34,000 6,51,000 4,00,000 5,50,000 4,00,000
Note: It is assumed that the company will maintain cash balance of `4,00,000 as in the beginning of the budget period, resorting to borrowing, if necessary. The company could
also place substantial amounts on short duration deposits, of 15 to 30 days during the first three months.
udgeting & Budgetary Contro