Nana Adom Company Limited is a wholesale company that deals in general goods. The following information relates to the next budget period.
1. Expenses: (in GH¢)

October November December
Selling & distribution 20,000 30,000 34,000
General & administration 15,000 18,000 12,000
Bad debts 21,000 15,000 20,000
Rate 8,000 6,000 10,000
Interest charges 1,600 2,000 2,400
Depreciation expenses 30,000 10,000 10,000

Expenses are payable in the month of incurrence.
2. A contingent liability of GH¢10,000 is expected to mature in November
3. Estimated cash balance at the end of September will be GH¢5000. Cash balances should
not be less than GH¢10,000. Cash can be borrowed in multiples of GH¢10,000 to finance
any deficit at an interest rate of 15% per annum.
4. The sales manager's salary, which is GH¢ 7000 per month is expected to increase by
GH¢1000 every month after June.
5. Motor vehicle will be purchased in November at GH¢240,000. Depreciation for motor van
should be calculated at 10% in December.
6. Credit purchases have been made as follows:
September GH¢200,000

October GH¢240,000
November GH¢200,000
December GH¢300,000
75% of purchases are paid for in the month of purchase and the remainder in the month
after purchase.
7. Details of expected sales (in units) are given below:
August 20,000
September 18,000
October 21,000
November 15,000
December 20,000
Sales are likely to be made at a unit price of GH¢ 30.
8. Cash sales is expected to be made as follows: August GH¢140,000
September GH¢100,000
October GH¢200,000
November GH¢120,000
December GH¢140,000
The pattern for the collection of debts from customers is expected to be as follows:
a. 60% in the month of sales (3% cash discount allowed).
b. 20% in the first month after the month of sale.
c. 15% in the second month after the month of sale.
d. 5% is usually regarded as bas debt
9. Excess funds are invested (in multiples of GH¢10,000) in short term securities, at an
interest rate of 20% per annum.
10. Borrowing must be paid together with any accrued interest whenever funds are available.

Required
Prepare cash budget, for the three month from October to December showing cash balance at the
end of December.