Solution 1

CASH BUDGET FOR THE PERIOD APRIL TO SEPTEMBER

Particulars \ Month
RECEIPTS:
1. Cash sales
2. Receipts from customers
a. of last month
b. of last to last month

April

May

June

July

August

September

16000

12000

16000

20000

16000

12000

84000
24000

48000
28000

36000
16000

48000
12000

60000
16000

48000
20000

124000

88000

68000

80000

92000

80000

PAYMENTS:
1. Payment to suppliers of materials
2. Interest on debentures
3. Advance tax

48000
3000

64000

80000

64000
3000
5000

48000

80000

b. Total Payments

51000

64000

80000

72000

48000

80000

c. Net Cash flow (a-b)

d. Opening balance
e. Closing balance (c+d)
f. Required closing balance
g. (Shortage) / Excess (e-f)
h. Investments to made
j. Avail overdraft
k. Net investment made (sum of h & i)

73000
20000
93000
20000
73000
73000

24000
20000
44000
20000
24000
24000

-12000
20000
8000
20000
-12000
0
-12000

8000
20000
28000
20000
8000
8000

44000
20000
64000
20000
44000
44000

0
20000
20000
20000
0

a. Total Receipts

137000

Solution 2

Shah Agencies
CASH BUDGET FOR THE PERIOD APRIL TO OCTOBER

Particulars \ Month

April

May

June

July

August

September

RECEIPTS:
1. Cash sales
2. Receipts from customers
a. of last month
b. of last to last month

6000

10400

10000

15000

18000

7000

14280
6100

16800
6120

29120
7200

28000
12480

42000
12000

50400
18000

a. Total Receipts

26380

33320

46320

55480

72000

75400

PAYMENTS:
1. Payment to suppliers of materials
2. Salaries
3. Rent
4. Misc. Expenses
5. Sales commission

36400
3000
1000
500
300

35000
3500
1000
500
520

52500
3500
1000
500
500

63000
4000
1000
500
750

24500
4000
1000
500
900

17500
3000
1000
500
350

b. Total Payments

41200

40520

58000

69250

30900

22350

-14820
20500
5680
10000
-4320

-7200
10000
2800
10000
-7200

-11680
10000
-1680
10000
-11680

-13770
10000
-3770
10000
-13770

53050
14130
67180
10000
57180

0
4320
81970
10000

0
7200

0
11680

0
13770

41100
10000
51100
10000
41100
36970
0

10000

10000

10000

14130

22180

c. Net Cash flow (a-b)

d. Opening balance
e. Closing balance (c+d)
f. Required closing balance
g. (Shortage) / Excess (e-f)
h. Repayment of overdraft
h. Investments to made
j. Avail overdraft
k. Net investment made (sum of h & i)
l. Effective closing balance c/f

45000

Notes:
1. Debtors outstanding on 31st March, 2005 Rs. 26500/-; which includes 80% sales of March and 24% of sales of February. It m
out of total outstanding of Rs. 20,400/- pertains to March (26500x80/104), and belongs to February, Rs. 6,100/-.
2. Sales of the month of November assumed to be at October level.

TO OCTOBER
October

5000
19600
21600
46200

17500
3000
1000
500
250
22250
23950
22180
46130
10000
36130
30000

16130

24% of sales of February. It means

uary, Rs. 6,100/-.

Solution 3
CASH BUDGET FOR THE PERIOD JANUARY TO JUNE
Particulars \ Month
RECEIPTS:
1. Cash sales
2. Receipts from customers
a. of last month
b. of last to last month
c.. of last to last month to last month
3. Sale of debentures

Jan.

Feb.

March

April

May

June

24000

20000

30000

48000

40000

40000

88000
48000
0
40000

48000
52800
32000

40000
28800
35200

60000
24000
19200

96000
36000
16000

80000
57600
24000

200000

152800

134000

151200

188000

201600

165000

90000

75000

112500

180000

150000

16000
10000
27000
0

16000
8000
21000
0

16000
8000
30000
0

20000
8000
24000
0

18000
10000
27000
0

18000
9000
27000
360

b. Total Payments

218000

135000

129000

164500

235000

204360

c. Net Cash flow (a-b)

d. Opening balance
e. Closing balance (c+d)
f. Required closing balance
g. (Shortage) / Excess (e-f)
h. Repayment of overdraft
h. Investments to made
j. Avail overdraft
l. Effective closing balance c/f

-18000
60000
42000
40000
2000

17800
42000
59800
40000
19800

5000
59800
64800
40000
24800

-13300
64800
51500
40000
11500

-2760
40000
37240
40000
-2760

0
0
42000

0
0
59800

0
11680
64800

0
13770
51500

-47000
51500
4500
40000
-35500
0
0
36000
40000

a. Total Receipts
PAYMENTS:
1. Payment to suppliers of materials
2. Salaries
2/3 rd of current month
1/3 rd of last month
3. Misc. expenses
4. Interest on overdraft

0
3000
40000

Solution 4

Particulars \ Month

CASH BUDGET FOR THE PERIOD JULY TO DECEMBER

(Rs. In lakh)
July
August
Sept.
Oct.
Nov.
Dec.

RECEIPTS:
1. Cash sales
2. Receipts from customers
a. of same month
b. of last month
3. Interest income
3. Sale of shares

8.00

8.00

10.00

10.00

12.00

13.00

15.52
13.58
0.00
0.00

15.52
15.52
0.00
20.00

19.40
15.52
2.00

19.40
19.40
0.00

23.28
19.40
0.00

25.22
23.28
2.00

a. Total Receipts

37.10

59.04

46.92

48.80

54.68

63.50

14.00

16.00

17.00

20.00

20.00

20.00

7.00
6.00
5.00

7.00
7.00
6.00

9.00
7.00
6.00

9.00
9.00
6.00

10.00
9.00
7.00

11.00
10.00
7.00

b. Total Payments

32.00

36.00

39.00

44.00

46.00

48.00

c. Net Cash flow (a-b)

d. Opening balance
e. Closing balance (c+d)
f. Required closing balance
g. (Shortage) / Excess (e-f)
h. Repayment of overdraft
h. Investments to made
j. Avail overdraft
l. Effective closing balance c/f

5.10
5.00
10.10
5.00
5.10

23.04
7.10
30.14
5.00
25.14

7.92
12.14
20.06
5.00
15.06

4.80
12.06
16.86
5.00
11.86

15.50
12.54
28.04
5.00
23.04

3.00
0.00
7.10

18.00
0.00
12.14

8.00
0.00
12.06

4.00
0.00
12.86

8.68
12.86
21.54
5.00
16.54
0.00
9.00
0.00
12.54

PAYMENTS:
1. Payment to suppliers of materials
2. Salaries
a. of same month
b. of last month
3. Misc. expenses

16.00
0.00
12.04

Note:
Total receivables from credit sales is 72.^ %. (80-0.80-1.60) of that 50%, i.e., 38.80 % received in same month, and 38.80%
will be received in next month.

same month, and 38.80%

Solution 5

Ranka Associates

i. Cash budget for each of the three months

July
Opening Balance
Receipts
Internal / Corporate Audit fees
Taxation fees
Project Consultancy fees
Payments
Rent
Stipend
Telephone
Office expenses & salaries
Training
Travel
Partner's & Assitants' Salaries
Computer
Advance tax
Branch Expenses

Rs. In '000
August
September
25
6
8
60
45
50
180
-

60
45
30
141
-

15

15
17
35
12
15
35

50
10
14
35
50
-

20
-

174
6

149
8

June
Rs. '000

July
Rs. '000

60
20
80
15
175

60
30
100
15
205

8
50
35
93
82

28
42
40
110
95

Closing Balance

60
50
40
142
15
15
40
13
15
40
20
158
16

ii. Working Capital Statement

Current assets
Internal / Corporate Audit fees
Taxation fees
Project Consultancy fees
Advance rent
Current Liabilities
Telephone
Office expenses
Partner's Salaries
Estimated working capital

Increase in working capital = Rs. 95000 - Rs. 82000 = Rs. 13000

Cash Flow Statement
Inflow
Rs. '000
Outflow
Opening Balance
25 Computer
Profits
32 Tax paid
Depriciation
30 Branch Expenses
Closing Balance (Bal. Fig.)
16 Increase in working capital
103
iii. Improvements to smoothen cash position:

Rs. '000
50
20
20
13
103

a. Computer can be bought through borrowed funds or can be leased. This will give
favourable balance for all months.
b. Advance tax can be deferred till September. Even the branch office expense can be
deferred.