CIMAPRO19-P01-1 Exam - Topic 9 Question 14 Discussion

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:

80% of the value of credit sales is received in the month after sale, 10% two months after sale and 8% three months after sale. The balance is written off as a bad debt.

75% of the value of credit purchases is paid in the month after purchase and the remaining 25% is paid two months after purchase.

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 $25,000 each. The scheduled payment date is in February.

The cash balance at 1 January is estimated to be $15,000.

Prepare a cash budget for each of the THREE months of January, February and March.

Select All the correct answers.