Most of the data is same as that given in the case. But some assumptions have changed.

Sales on cash basis so no accounts recievables in balance sheet.

Purchases of inventory is double the CGS of the month to increase stock in the shop
Half the purchases of inventory paid in the same month, the rest paid in the next month
Therefore Accounts Payable liabilty in balance sheet.
In-Puts : Assumptions M1 M2 M3 Quarter 1
Sales 1,000,000 1,200,000 1,500,000 3,700,000
Gross Profit as %age of Sales 60% 60% 60%
%age of CGS Purchased 200% 200% 200% Purchases are twice the inv sold
CGS = Sales * 0.4 400,000 480,000 600,000 an out put
Cost of Invent Purchased 800,000 960,000 1,200,000 an out put
%age of inv purchased on cash 50% 50% 50% 15 day's credit
Out-Puts -
Cash Budget for each of the 3 months and total for the first quarter, Q1
Cash Inflows M1 M2 M3 TOTAL Q1
Investment by owners 7,000,000 0 0 7,000,000
Collection of Sales 1,000,000 1,200,000 1,500,000 3,700,000
Total Inflows (a) 8,000,000 1,200,000 1,500,000 10,700,000

Cash Outflows
Security Deposit 5,000,000 0 0 5,000,000
paid for inventory Purchases 400,000 880,000 1,080,000 2,360,000 50% paid same month , 50%
Business License 6,000 - - 6,000
Organizational Cost 10,000 0 0 10,000
Advance Rent 120,000 0 0 120,000
Fixture & Furniture 600,000 0 0 600,000
Advertising 100,000 50,000 50,000 200,000
Salaries 0 60,000 60,000 120,000
Utilities 0 20,000 20,000 40,000
Corp. Income Tax 0 0 0 0
Total Outflows (b) 6,236,000 1,010,000 1,210,000 8,456,000

Net Cash Flows (a - b) 1,764,000 190,000 290,000 2,244,000

add beg Cash Balance 0 1,764,000 1,961,820 0
Less Minim Cash Required (J) 200,000 200,000 200,000 200,000
Surplus or Shortage of Cash( m) 1,564,000 1,754,000 2,051,820 2,044,000
½ % Interest Income on surplus (n) 0 7,820 8,770 16,590
Cash after loan & Interest (k=m+n) 1,564,000 1,761,820 2,060,590 2,060,590
Ending Cash Balance (J +k) 1,764,000 1,961,820 2,260,590 2,260,590
Projected Income Statements for the first 3 Months, and total first quarter
M1 M2 M3 TOTAL Q1
Sales 1,000,000 1,200,000 1,500,000 3,700,000
CGS 400,000 480,000 600,000 1,480,000
GP 600,000 720,000 900,000 2,220,000
Operating Expenses
Rent 10,000 10,000 10,000 30,000
Salaries 60000 60000 60000 180,000
Advertising 100,000 50,000 50,000 200,000
Utilities 20,000 20,000 20,000 60,000
License amortization 500 500 500 1,500
Depr. Expense fixture 10,000 10,000 10,000 30,000
Amortization of Org. cost 166 166 166 498
Total Op. Expenses 200,666 150,666 150,666 501,998

Operating Profits (EBIT) 399,334 569,334 749,334 1,718,002

Add Interest Income 7,820 8,770 10,259 26,849
Less Interest Expense 0 0 0 0
EBT 407,154 578,104 759,593 1,744,851
Less Corp Income Tax 30% 122,146 173,431 227,878 523,455
NI 285,008 404,673 531,715 1,221,396
Projected Balance Sheets on the last day of each of the next three months
ASSETS M1 M2 M3 Last day of Qurt 1
Cash 1,764,000 1,961,820 2,260,590 2,260,590
Account Receivable 0 0 0 0
Inventory 400,000 880,000 1,480,000 1,480,000 Ending Inv= Beg Inv + purcha
Fixtures 600,000 600,000 600,000 600,000
Less: Accumul depreciation 10,000 20,000 30,000 30,000
Fixture (net) 590,000 580,000 570,000 570,000
Organizational cost 9,834 9,668 9,502 9,502
License fee 5,500 5,000 4,500 4,500
Prepaid Rent 110,000 100,000 90,000 90,000
S-Deposit 5,000,000 5,000,000 5,000,000 5,000,000
Interest Recievable 7,820 8,770 10,259 10,259
Total Assets 7,887,154 8,545,258 9,424,851 9,424,851

Accounts Payable 400,000 480,000 600,000 600,000 Ending A/p = Beg A/p + purch
Salaries Payable 60,000 60,000 60,000 60,000
Utilities Payable 20,000 20,000 20,000 20,000
Advertising Payable 0 0 0 0
Income Tax Payable 122,146 295,577 523,455 523,455
Total Liabilities 602,146 855,577 1,203,455 1,203,455
Paid -up Share Capital 7,000,000 7,000,000 7,000,000 7,000,000
RE 285,008 689,681 1,221,396 1,221,396
OE 7,285,008 7,689,681 8,221,396 8,221,396
TL & OE 7,887,154 8,545,258 9,424,851 9,424,851

Notes:
1: In cash budget no cash outflow for income tax shown. Tax was paid in next year
but income tax expense showed in each month's income statement.
therefore In balance sheet income tax payable liability kept increasing each month.
2:End Acc Pay Ables in each month's balance sheet was calculated as shown below
Beg Acc P/Able + Purchases - End Acc P/Ables = cash paid for purchases of inventory
3: End Inventory in the balance sheet of each month was calculated as shown below
Beg inventory + Purchases - End Inventory = CGS
4: End cash balance from cash budget was transferred to balance sheet as an asset Cash
5: End RE in balance sheet was calculated as shown below
End RE = Beg RE + NI - cash dividends - stock dividends
6.In cash budget interest income of a month was shown as received next month
in income statement interest income was shown each month as earned
As interest income of a month was not received in the same month
therefore in Balance sheet of M1 and M2 it was shown as interest recievable
50% paid same month , 50% next month
Ending Inv= Beg Inv + purchases - CGS

Ending A/p = Beg A/p + purchases - cash paid for inv

Most of the data is same as that given in the case. But some assumptions have changed.
Sales on cash basis so no accounts recievables in balance sheet.
Purchases of inventory is double the CGS of the month to increase stock in the shop
Half the purchases of inventory paid in the same month, the rest paid in the next month
Therefore Accounts Payable liabilty in balance sheet.
In-Puts : M1 M2 M3 Quarter 1
Sales ### ### ### 3,700,000
Gross Profi 60% 60% 60%
%age of C 200% 200% 200% Purchases are twice the inv sold
CGS = Sales 400,000 480,000 600,000 an out put
Cost of Inv 800,000 960,000 ### an out put
%age of inv 50% 50% 50% 15 day's credit
Out-Puts -
Cash Budget for each of the 3 months and total for the first quarter, Q1
Cash Inflo M1 M2 M3 TOTAL Q1
Investment7,000,000 0 0 7,000,000
Collection 1,000,000 1,200,000 1,500,000 3,700,000
Total Inflo 8,000,000 1,200,000 1,500,000 ###

Cash Outflows
Security De5,000,000 0 0 5,000,000
paid for in 400,000 880,000 ### ### 50% paid same month , 50% next month
Business Li 6,000 - - 6,000
Organizatio 10,000 0 0 10,000
Advance Re 120,000 0 0 120,000
Fixture & F 600,000 0 0 600,000
Advertising 100,000 50,000 50,000 200,000
Salaries 0 60,000 60,000 120,000
Utilities 0 20,000 20,000 40,000
Corp. Inco 0 0 0 0
Total Outfl 6,236,000 1,010,000 1,210,000 8,456,000

Net Cash Flo1,764,000 190,000 290,000 2,244,000

add beg Ca 0 1,764,000 1,961,820 0
Less Minim 200,000 200,000 200,000 200,000
Surplus or 1,564,000 1,754,000 2,051,820 2,044,000
½ % Interes 0 7,820 8,770 16,590
Cash after lo 1,564,000 1,761,820 2,060,590 2,060,590
Ending Cash1,764,000 1,961,820 2,260,590 2,260,590
Projected Income Statements for the first 3 Months, and total first quarter
M1 M2 M3 TOTAL Q1
Sales 1,000,000 1,200,000 1,500,000 3,700,000
CGS 400,000 480,000 600,000 1,480,000
GP 600,000 720,000 900,000 2,220,000
Operating Expenses
Rent 10,000 10,000 10,000 30,000
Salaries 60000 60000 60000 180,000
Advertising 100,000 50,000 50,000 200,000
Utilities 20,000 20,000 20,000 60,000
License amo 500 500 500 1,500
Depr. Expen 10,000 10,000 10,000 30,000
Amortizatio 166 166 166 498
Total Op. 200,666 150,666 150,666 501,998

Operating P 399,334 569,334 749,334 1,718,002

Add Intere 7,820 8,770 10,259 26,849
Less Intere 0 0 0 0
EBT 407,154 578,104 759,593 1,744,851
Less Corp 122,146 173,431 227,878 523,455
NI 285,008 404,673 531,715 1,221,396
Projected Balance Sheets on the last day of each of the next three months
ASSETS M1 M2 M3 Last day of Qurt 1
Cash 1,764,000 1,961,820 2,260,590 2,260,590
Account Re 0 0 0 0
Inventory 400,000 880,000 1,480,000 1,480,000 Ending Inv= Beg Inv + purchases - CGS
Fixtures 600,000 600,000 600,000 600,000
Less: Accum 10,000 20,000 30,000 30,000
Fixture (net 590,000 580,000 570,000 570,000
Organizatio 9,834 9,668 9,502 9,502
License fee 5,500 5,000 4,500 4,500
Prepaid Re 110,000 100,000 90,000 90,000
S-Deposit 5,000,000 5,000,000 5,000,000 5,000,000
Interest Re 7,820 8,770 10,259 10,259
Total Asset7,887,154 8,545,258 9,424,851 9,424,851

Accounts P 400,000 480,000 600,000 600,000 Ending A/p = Beg A/p + purchases - cash paid for inv
Salaries Pa 60,000 60,000 60,000 60,000
Utilities Pa 20,000 20,000 20,000 20,000
Advertising 0 0 0 0
Income Tax 122,146 295,577 523,455 523,455
Total Liabil 602,146 855,577 1,203,455 1,203,455
Paid -up Sh 7,000,000 7,000,000 7,000,000 7,000,000
RE 285,008 689,681 1,221,396 1,221,396
OE 7,285,008 7,689,681 8,221,396 8,221,396
TL & OE 7,887,154 8,545,258 9,424,851 9,424,851

Notes:
1: In cash budget no cash outflow for income tax shown. Tax was paid in next year
but income tax expense showed in each month's income statement.
therefore In balance sheet income tax payable liability kept increasing each month.
2:End Acc Pay Ables in each month's balance sheet was calculated as shown below
Beg Acc P/Able + Purchases - End Acc P/Ables = cash paid for purchases of inventory
3: End Inventory in the balance sheet of each month was calculated as shown below
Beg inventory + Purchases - End Inventory = CGS
4: End cash balance from cash budget was transferred to balance sheet as an asset Cash
5: End RE in balance sheet was calculated as shown below
End RE = Beg RE + NI - cash dividends - stock dividends
6.In cash budget interest income of a month was shown as received next month
in income statement interest income was shown each month as earned
As interest income of a month was not received in the same month
therefore in Balance sheet of M1 and M2 it was shown as interest recievable