Question

Create a cash budget. You can create a fictional budget based on a fictional business, or you can create your own personal budget.

You must include the following:

Beginning Cash

Sources of Cash

Use of Cash

Net Cash Position

If you are doing your personal budget your sources of cash will include any money you receive. (Allowance, paycheck, student loans). Your use of cash will include any expenses. (Cell phone, car insurance, house).

Answer 1

Assuming my business is Retail trade, I am presenting the cash budget for next three months as follows:

Cash Budget

	January($)	February ($)	March ($)
Begining balance (A)	NIL	198,000	205,000
Sources of Cash
Capital Invested:	400,000	---	---
Notes borrowed/issued	200,000	---	---
Receipts from Cash Sales	30,000	40,000	50,000
Receipt from Accounts Receivable	10,000	20,000	30,000
Total Sources of Cash (B)	640,000	60,000	80,000
Total Cash Available (C=A+B)	640,000	258,000	285,000
Usage of Cash:
Payment to Accounts Payable	32,000	48,000	64,000
Purchase of Property, plant and equipment	400,000	---	---
License and other charges	5,000	---	---
Property Taxes Paid	---	---	3,000
Salaries and Wages	4,000	4,000	4,000
Interest on Notes (200,000×6%×1/12)	1000	1,000	1,000
Total Usage of Cash (D)	442,000	53,000	72,000
Ending Balance of Cash (C-D)	198,000	205,000	213,000

Note:

1. Assumed the borrowings are made in notes of 200,000 at the rate of 6% pa. Interest paid at end of every month.