Just Law Ltd is preparing a budget for the quarter year ended 31 December 2025. The information available for the budget is as follows.

1. The firm's senior lawyers hourly charge-out rate for the year ended 30 September 2025 was $260 but Just Law intends to increase this by 5% for the budget period. Just Law also employs Xe Jun, a newly appointed legal executive, and charges her work out at $100 per hour and does not intend to increase this for the next year.

2. Carat estimates that the following hours will be billed to clients for the quarter.

Seniors 650 hours Xe Jun 100 hours 3. The services are all provided on credit and are collected as: 60% in the same quarter and 40% in the following quarter.

4. The monthly expenses for the year ended 30 September 2025 are provided below, with Just Law’s estimates of how they will change for the budget period.

Required Prepare a budgeted statement of financial performance, a cash budget and a budgeted statement of financial position for the quarter ending 31 December 2025.

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Depreciation Electricity Year ended 30 Sept. 2025 Year ended 30 Sept. 2026 No increase $400 500 Increase of 10% Insurance 2000 Increase of 20% Long-service leave 300 2% of salaries provision Rent 2 000 Increase of 5% Salaries 15 000 Increase of 5% Stationery Telephone 500 1000 No increase Increase of 3% 5. Insurance is paid annually in October. Rent is paid 1 month in advance and electricity and telephone expenses are paid in the month after they are incurred. All other expenses are paid in the month they occur. 6. Carat intends to buy new office furniture at the end of December for $8 200. 7. The statement of financial position as at 1 October 2025 has the following account balances. Cash at bank $52.000 Accumulated depreciation $ 14400 Accounts receivable 75 600 Electricity payable 500 Prepaid rent 2 100 Telephone payable 1 000 Furniture and equipment 24.000 Provision for long-service leave 7200 Capital 130 600