Schedules of Budgeted Cash for Collection for Trade Receivables
Cash Collection from	January	February	March
Collections from November 2022	$38,400
Collections from December 2022	$210,000	$48,000
Collections from January 2023	$343,200	$227,500	$52,000
Collections from February 2023		$369,600	$245,000
Collections from March 2023			$422,400
Total Cash Collection for Trade Receivables	$591,600	$645,100	$719,400

Schedule of Expected Cash Disbursement for Account Payable
Cash Payment From	January	February	March
December 2022 Purchases on Account	$ 57,000
January 2023 Purchases on Account	$ 333,200	$ 60,000
February 2023 Purchases on Account		$ 399,840	$ 72,000
March 2023 Purchases on Account			$ 449,820
Collections from March 2023
Total Cash Collection for Trade Payable	$ 390,200	$ 459,840	$ 521,820

Cash Budget
Quarter Ending March 31, 2023
	January	February	March	Total
Beginning Cash Balance	$ (146,000)	$ (174,000)	$ (238,200)
Add: Cash Receipts
Cash Sales	$ 171,475	$ 144,940	$ 236,720	$ 553,135
Collection of Sales	$ 591,600	$ 645,100	$ 719,400	$ 1,956,100
Rent		$ 96,000	$ 48,000	$ 144,000
Sales of Motor Vehicles		$ 150,000	$ 75,000	$ 225,000
Bond Investment	$ 450,000			$ 450,000
Interest from Bond	$ 18,750			$ 18,750
Total Cash Available	$ 1,085,825	$ 862,040	$ 840,920
Less: Cash Payments
Cash Purchases	$ 44,625	$ 30,400	$ 55,100	$ 130,125
Payment of Purchases on Accounts	$ 390,200	$ 459,840	$ 521,820	$ 1,371,860
Purchases of Office Furniture & Fixtures		$ 140,000	$ 42,000	$ 182,000
Fixed Operating Expenses	$ 132,000	$ 132,000	$ 132,000	$ 396,000
Other Operating Expenses	$ 56,000	$ 56,000	$ 56,000	$ 168,000
Payment on Loan	$ 320,000			$ 320,000
Payment on Loan Interest	$ 35,000			$ 35,000
Wages and Salaries	$ 282,000	$ 282,000	$ 282,000	$ 846,000
Cash Ending Balance	$ (174,000)	$ (238,200)	$ (248,000)

Requirement:

Based on the above information answer the following

• Another team member who is preparing the Budgeted Balance Sheet for the business for the same quarter ending March 31, 2023 and has asked you to furnish him with the figures for the expected trade receivables and payables to be included in the statement. Is that a reasonable request? If yes, what should these amounts be?
• Upon receipt of the budget, the team manager, Damion Brownie, has now informed you that, in keeping with industry players, the management of Varsity Supplies & Things have indicated an industry requirement to maintain a minimum cash balance of $162,000 each month. He has also noted that management is very keen on keeping the gearing ratio of the business as low as possible and would therefore prefer to cushion any gaps internally using equity financing. Based on the budget prepared, will the business be achieving this desired target? Suggest three (3) internal strategies that may be employed by management to improve the organization's monthly cash flow and militate against or reduce any possible shortfall reflected in the budget prepared. Each strategy must be fully explained.

Answer rating: 100% (QA)

Cash Budget Analysis and Recommendations 1 Trade Receivables and Payables for Budgeted Balance Sheet Yes the request for trade receivables and payable... View the full answer