Garden Sculptures presents the following data relating to the expected operations for the months of January to March 2018.

Required
a. Prepare a cash budget on a monthly basis for the three months ending March 2018. The cash balance at 31 December 2017 was $25,000.
b. Explain how a variance report would help the owner of Garden Sculptures monitor the entity’s cash position.

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Credit services provided Receipts from accounts receivable Cash services Cash received from the sale of old equipment Salaries and wages paid Depreciation on equipment Payment for supplies Cash purchase of new equipment Administration costs Credit purchase of supplies January $ 8000 20000 1950 8500 500 2600 20000 2000 1900 February $12000 30 000 2250 2000 8500 500 3 500 2000 2150 March $12 400 5000 3300 8500 500 2 800 2000 1890