Cash budget question.docx (CFM22A2)

T 3.2
The management of Sweets Limited decided to draw up a cash budget for May, June and July.
The following information is available:
Actual Budgeted
Feb March Apr May Jun Jul
R R R R R R
Sales:
Cash 150 000 180 000 200 000 300 000 320 000 300 000
Credit 400 000 500 000 580 000 580 000 600 000 650 000
Purchases 450 000 500 000 800 000 680 000 800 000 700 000
Wages and salaries 60 000 60 000 65 000 65 000 70 000 70 000
Depreciation
Interest paid 25 000 25 000 25 000 25 000 35 000 35 000
12 000 13 000 14 000 14 000 14 000 15 000




Additional information:
1. Credit sales are collected as follows:
 60% in the month of sale
 30% in the following month (2ND month);
 rest is written off.
2. On 30 May value-added tax of R150 000 is to be paid.
3. 30% of all purchases are made in cash. The rest are all credit purchases and are paid in
the month following the transaction.
4. On 30 July accrued bonuses of R80 000 must be paid.
5. The overdrawn bank account on 30 April amounts to R70 000.


You are required to:
Prepare the cash budget of SWEETS Limited for the months May, June and July.