CH is a building supplies company that sells products to trade and private customers. Budget data for each of the six mo

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CH is a building supplies company that sells products to trade
and private customers. Budget data for each of the six months to
March are given below: Oct Nov Dec Jan Feb Mar (K’000) (K’000)
(K’000) (K’000) (K’000) (K’000) Credit sales 250 250 250 260 260
280 Cash Sales 60 60 65 75 80 90 Credit purchases 170 180 180 200
200 200 Other operating costs 90 90 90 122 123 123 (excluding
depreciation) 80 per cent of the value of credit sales is received
in the month after sale, 10 per cent two months after sale and 8
per cent three months after sale. The balance is written off as a
bad debt. 75 per cent of the value of credit purchases is paid in
the month after purchase and the remaining 25 per cent is paid two
months after purchase. 4 All other operating costs are paid in the
month they are incurred. CH has placed an order for four new
forklift trucks that will cost K25,000 each. The schedule payment
date is in February. The cash balance at 1 January is estimated to
be K15,000. Required: Prepare a cash budget for each of the THREE
months of January, February and March. (6 marks)