2D GOING SOLO CASH BUDGETS
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2D
GOING SOLO
CASH BUDGETS
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Cash BudgetUnit 2D
A cash budget allows us to monitor cash flow
It shows future planned receipts and payments of cash
Here is an example of a cash budget: July Aug Sept Oct Nov Dec
Opening Balance
Add Receipts:
Sales
Total Receipts
Less Payments:
Purchases
Equipment
General Expenses
Total Payments
Closing Balance
1,000
15,500
8,500
3,800
500
15,000 15,000 14,000 14,000 13,000
8,000 8,000 7,000 7,000 6,000
- 15,000 - 15,000 -
500 500 500 500 500
16,500
12,800
3,700
3,700
18,700
8,500
10,200
10,200
25,200
23,500
1,700
1,700
15,700
7,500
8,200
8,200
22,200
22,500
300
300
12,700
6,500
6,200
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Unit 2D Cash Budget
A cash budget is prepared to:
• make sure there is enough cash available
• monitor the timing of cash in and cash out
• see if and when a bank overdraft is required
• plan the timing of the purchase of a
fixed asset
Cash Budget
• avoid a negative cash flow situation