Closing balances and overdrafts
Follow a three month cash budget to the closing balance of each month, and see what it means when that balance goes below zero.
Task 1Three months ahead3 questions
Put the receipts and payments together, and the budget shows the bank balance at the end of each month.
| Item | June | July | August |
|---|---|---|---|
| Receipts from customers | 26,400.00 | 24,400.00 | 15,200.00 |
| Materials | (9,000.00) | (12,000.00) | (6,000.00) |
| Wages | (7,000.00) | (7,000.00) | (7,000.00) |
| Rent | (1,500.00) | (1,500.00) | (1,500.00) |
| Other costs | (1,000.00) | (1,000.00) | (1,000.00) |
| Insurance for the year | (6,000.00) | ||
| New spindle moulder | (14,000.00) | ||
| Total payments | (24,500.00) | ? | (15,500.00) |
| Net cash flow | 1,900.00 | ? | (300.00) |
| Opening balance | 7,600.00 | ? | ? |
| Closing balance | ? | ? | ? |
A figure in brackets is money going out, or a negative figure.
Task 2Below zero4 questions
Task 3The overdraft limit3 questions