Prickly Pear Ltd wishes to prepare a cash budget for the first quarter of 2019. In response to your request for past and projected financial data, you receive the following:

Of sales, 70% of sales are on credit, with 65% collected during the month of sale, 30% collected during the month following the sale, and 5% during the second month after the sale; 30% of the projected sales are for cash. Ignore GST. Since all suppliers require substantial lead time, purchases of inventory are made 2 months in advance of sale and are paid for 1 month in advance of sale. The cost of sales is 50% of the selling price. Other regular monthly cash payments (ignoring GST) are as follows.

A special advertising campaign is planned that will require a cash payment of $16 650 on 1 March. An interim dividend of $13 500 is planned for payment on 16 February.
On 1 January 2019, there was an outstanding bank debt of $90 000 that must be paid off in 5 months by making principal repayments of $18 000 at the end of each month. Interest is payable at the end of each month at 1% per month on the balance outstanding at the beginning of the month. The cash balance on 1 January is estimated to be $112 500.

Required

Prepare the cash budget of Prickly Pear Ltd covering January, February and March 2019.

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Projected sales (excludes GST): November 2018 December 2018 $144 000 147 000 January 2019 198 000 February 2019 190 000 March 2019 288 000 April 2019 216000 May 2019 216000