20. Davis Ltd is a building supplies company that sells products to trade and private customers. Budget data for each of the six months to March are given below: Oct Nov Dec Jan Feb Mar 000 000 000 000 000 000 Credit sales 250 250 250 260 260 280 Cash sales 60 60 65 75 80 90 Credit purchases 170 180 180 200 200 200 Other operating costs (excluding 90 90 90 122 123 123 depreciation) Eighty per cent of the value of credit sales received in the month after sale, 10 per cent two months after sale and 8 per cent three months after sale. The balance is written off as a bad debt. Seventy-five per cent of the value of credit purchases is paid in the month after purchase, and the remaining 25 per cent is paid two months after purchase. All other operating costs are paid in the month they are incurred. Davis has placed an order for four new forklift trucks that will cost 25,000 each. The scheduled payment date is in February The opening cash balance in January will be 15,000. Required (a) Prepare a cash budget for January, February and March. (b) Explain how budgets provide a basis for performance evaluation