“BDL Ltd. is currently preparing its cash budget for the year to 31 March 20XX. An extract from its sales budget for the same year shows the following sales values. Rs March 60,000 April 70,000 May 55,000 June 65,000 40% of its sales are expected to be for cash. Of its credit sales, 70% are expected to pay in month after sale and take a 2% discount. 27% are expected to pay in the second month after the sale, and the remaining 3% are expected to be bad debts. The value of sales budget to be shown in the cash budget for May 20XX is”

The correct answer is A. Rs. 60,532.

The sales budget for May 20XX is Rs. 55,000. Of this, 40% is expected to be for cash, which is Rs. 22,000. The remaining 60% is expected to be on credit, of which 70% is expected to be paid in the month after sale and take a 2% discount. This means that 0.7 * 0.6 = 42% of the sales budget for May 20XX is expected to be received in May. This is equal to Rs. 23,100. The remaining 28% of the sales budget for May 20XX is expected to be received in the second month after sale. This is equal to Rs. 15,450. Therefore, the total value of sales budget to be shown in the cash budget for May 20XX is Rs. 22,000 + Rs. 23,100 + Rs. 15,450 = Rs. 60,532.

Option B is incorrect because it includes the value of sales that are expected to be received in June. Option C is incorrect because it includes the value of sales that are expected to be received in both May and June. Option D is incorrect because it includes the value of sales that are expected to be received in all three months of March, April, and May.