A The summarised statement of financial position of Newland Traders at 30 May 2013 was as follows:

\begin{tabular}{lrr}

$\mathbf{1 0 0 0}$ & $\mathbf{1 0 0 0}$ \\

Non-current assets at cost & & 610 \\

Less Depreciation & & $\underline{264}$ \\

& & 346 \\

Current assets & 210 & \\

Inventory & 315 & \\

Accounts receivable- & $\underline{48}$ & $\underline{573}$ \\

Cash at bank and in hand & & \\

Less Current liabilities & & $\underline{\underline{1288}}$ \\

Accounts payable & & $\underline{791}$ \\

Equity & & 600 \\

Issued capital & & 150 \\

General reserve & & $\underline{411}$ \\

Retained profits & &

\end{tabular}

Selling and materials prices at 30 May 2013 provide for a gross profit at the rate of $25 \%$ of sales.

The accounts payable at 30 May 2013 represent the purchases for May 2013, and the accounts receivable the sales for April of $£ 150,000$ and May of $£ 165,000$.

Estimates of sales and expenditure for the six months to 30 November 2013 are as follows:

(i) Sales for the period at current prices will be $£ 800,000$. Sales for the months of September and October will each be twice those of the sales in each of the other months.

(ii) Inventory at the end of each month will be the same as at 30 May 2013 except that at 30 November 2013 it will be increased to $20 \%$ above that level.

(iii) Creditors will be paid one month after the goods are supplied and debtors will pay two months after the goods are supplied.

(iv) Wages and expenses will be $£ 20,000$ a month and will be paid in the month in which they are incurred.

(v) Depreciation will be at the rate of $£ 5,000$ a month.

(vi) There will be capital expenditure of $£ 80,000$ on 1 September 2013. Depreciation, in addition to that given in ( $v$ ) above, will be at the rate of $10 \%$ per annum on cost.

(vii) There will be no changes in issued capital, general reserve or prices of sales or purchases.

\section*{Required:}

(a) Sales and purchases budgets and a budgeted income statement for the six months ending 30 November 2013.

(b) A budgeted statement of financial position as at 30 November 2013.

(c) A cash flow budget for the six months ended 30 November 2013 indicating whether or not it will be necessary to make arrangements for extra finance and, if so, your recommendation as to what form it should take.

Show all your calculations.