August (actual) September (actual) October (forecast) November (forecast) December (forecast) January(forecast) February (forecast) March (forecast) April (forecast) GHC 000 400,000 500,000 600,000 700,000 800,000 800,000 700,000 600,000 500,000. B. 25% of the grants are collected during the month of the grant, 50o ase collected in the month following the grant, and 25% ate collected on the second month following the grant. Payment of Local Purchase Order is issued to Afran Ltd. for supply of for C. cement and iron rods. The purchases are 50% of the capital grant and are paid by one month prior to the capital grant. Wages and salaries are 24% of the capital grants and are paid in the D. same month as the capital grant. E. SSF contribution of GHC 4.000.000 is paid each month. Additionally. Maintenance of Motor Vehicles costs of GHC 8,000,000 per month will be incurred for October and November, GHC 20,000,000 for December and January; and GHC 8,000,000 for February and March. F. Training and development expenses of GHC 10,000,000 each are expected to be paid in October and January. A capital expenditure of GHC 100,000,000 will occur in October and the Ministry has a Mortgage payment of GHC 5.000,000 due each of the six months. G. The cash balance at the end of September is GHC 125, 000,000 and the Ministry wants to maintain a minimum balance of GHC 60,000,000 at all times. The Ministry will borrow the amounts necessary to ensure that the minimum balance is achieved. If the cash balance is above the minimum and there is still a loan balance from the previous months, excess funds will be applied to the loan balance until it is eliminated.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 8MC: Assume that it is now July of Year 1 and that the brothers are developing projected financial...

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Prepare a cash budget for the ministry for six months period ending 31st March

August (actual)
September (actual)
October (forecast)
November (forecast)
December (forecast)
January(forecast)
February (forecast)
March (forecast)
April (forecast)
GHC 000
400,000
500,000
600,000
700,000
800,000
800,000
700,000
600,000
500,000.

B. 25% of the grants are collected during the month of the grant, 50o ase
collected in the month following the grant, and 25% ate collected on
the second month following the grant.
Payment of Local Purchase Order is issued to Afran Ltd. for supply of
for
C.
cement and iron rods. The purchases are 50% of the capital grant and
are paid by one month prior to the capital grant.
Wages and salaries are 24% of the capital grants and are paid in the
D.
same month as the capital grant.
E. SSF contribution of GHC 4.000.000 is paid each month. Additionally.
Maintenance of Motor Vehicles costs of GHC 8,000,000 per month
will be incurred for October and November, GHC 20,000,000 for
December and January; and GHC 8,000,000 for February and March.
F. Training and development expenses of GHC 10,000,000 each are
expected to be paid in October and January. A capital expenditure of
GHC 100,000,000 will occur in October and the Ministry has a
Mortgage payment of GHC 5.000,000 due each of the six months.
G. The cash balance at the end of September is GHC 125, 000,000 and
the Ministry wants to maintain a minimum balance of GHC
60,000,000 at all times. The Ministry will borrow the amounts
necessary to ensure that the minimum balance is achieved. If the cash
balance is above the minimum and there is still a loan balance from
the previous months, excess funds will be applied to the loan balance
until it is eliminated.

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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