UKCash Budget

Aqib

Hello Everyone
Please help me in making a cash budget from the following information. I am a new student and would be thankful for your help.

Question:
Mr. David Gladstone setting up a small business providing cleaning services to offices on a trading estate in Scarborough. She has asked you to help her prepare a cash flow forecast for her first 12 months of trading. You should produce a forecast from January to December based on the information provided below. Sales and purchases for the 12 months are expected to be as follows.

 Month​ Sales​ Purchases​ January £5,000 £600 February £5,000 £600 March £5,000 £600 April £5,000 £600 May £5,000 £600 June £5,000 £600 July £4,000 £500 August £4,000 £500 September £5,000 £600 October £6,000 £650 November £6,000 £650 December £6,000 £650

At the beginning of January, David Gladstone will buy two small cars, to drive herself and staff to the offices, each costing £10,000. He will invest £15,000 of his own money and has agreed a bank loan of £7000. David Gladstone will receive the loan in January and start repayments the following month at a fixed rate of £250 per month.

When meeting with bank manager, He also agreed a business overdraft that will be charged at a rate of 1 per cent on any negative closing balances. In order to start trading in January, He buys £4000 worth of cleaning equipment, including vacuum cleaners and floor buffers. In addition, He spends £150 on less durable (not as long-lasting) products such as dusters and mops, which He plans to replace every second month. David Gladstone plans to offer 30 days’ credit terms to two of his bigger cleaning contracts. These two combined will account for £2200 of his monthly sales.

David Gladstone has rented a small lock-up to store his equipment and materials at a cost of £600 per month. He will employ four cleaners, each earning £400 per month, and a cleaning supervisor earning an annual salary of £7200. He will withdraw £1000 a month for herself, and hopes to be able to increase this to £1200 per month after six months.

Additional monthly costs include: • £300 car insurance • £20 advertising • £100 fuel.

Ian

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Aqib

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Aqib

 Cash Budget David Gladstone January February March April May June July August September October November December Receipts Sales 5,000​ 5,000​ 5,000​ 5,000​ 5,000​ 5,000​ 4,000​ 4,000​ 5,000​ 6,000​ 6,000​ 6,000​ Less: 2200 -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ -2,200​ Add: Previous 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ Sales Proceeds 2,800​ 5,000​ 5,000​ 5,000​ 5,000​ 5,000​ 4,000​ 4,000​ 5,000​ 6,000​ 6,000​ 6,000​ Loan Amount 7,000​ Cash Invested 15,000​ Total Receipts 24,800​ 5,000​ 5,000​ 5,000​ 5,000​ 5,000​ 4,000​ 4,000​ 5,000​ 6,000​ 6,000​ 6,000​ Payments Purchases 600​ 600​ 600​ 600​ 600​ 600​ 500​ 500​ 600​ 650​ 650​ 650​ Cars Payment 20,000​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ Loan Repayment 0​ 250​ 250​ 250​ 250​ 250​ 250​ 250​ 250​ 250​ 250​ 250​ Cleaning Tools 4,000​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ 0​ Mops etc 150​ 0​ 150​ 0​ 150​ 0​ 150​ 0​ 150​ 0​ 150​ 0​ Other Costs 420​ 420​ 420​ 420​ 420​ 420​ 420​ 420​ 420​ 420​ 420​ 420​ Salaries 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ 2,200​ Drawings 1,000​ 1,000​ 1,000​ 1,000​ 1,000​ 1,000​ 1,200​ 1,200​ 1,200​ 1,200​ 1,200​ 1,200​ Rent 600​ 600​ 600​ 600​ 600​ 600​ 600​ 600​ 600​ 600​ 600​ 600​ Total Payments 28,970​ 5,070​ 5,220​ 5,070​ 5,220​ 5,070​ 5,320​ 5,170​ 5,420​ 5,320​ 5,470​ 5,320​ Net Receipts -4,170​ -70​ -220​ -70​ -220​ -70​ -1,320​ -1,170​ -420​ 680​ 530​ 680​ Opening Bank Bal. 0​ -4,212​ -4,325​ -4,590​ -4,707​ -4,976​ -5,096​ -6,480​ -7,727​ -8,228​ -7,623​ -7,164​ Closing Bank Bal. -4,170​ -4,282​ -4,545​ -4,660​ -4,927​ -5,046​ -6,416​ -7,650​ -8,147​ -7,548​ -7,093​ -6,484​ Overdraft Charge -42​ -43​ -45​ -47​ -49​ -50​ -64​ -77​ -81​ -75​ -71​ -65​ Closing Bank Bal. C/F -4,212​ -4,325​ -4,590​ -4,707​ -4,976​ -5,096​ -6,480​ -7,727​ -8,228​ -7,623​ -7,164​ -6,549​

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