20 marks The accounts manager has requested your assistance in calculating the cash budget for the next few months. They are concerned that the business often doesn't have money available in their bank account. They have provided you with the following information. Round off any decimals to the nearest whole number. Budgeted sales August: AED95 500 September: AED110 200 October: AED150000 November: AED158000 December: AED148500 Budgeted purchases September: AED45,000 October: AED92,500 November: AED135,000 December: AED124,500 January: AED84,200 Based on previous information, ney predict 50% of their sales are cash sales. 60% of their purchases are cash purchases and the other 40% are on credit. Credit sales are received two months after the sale. Credit Purchases are paid in the month following the transaction. Additional information: . They are planning on taking out a loan in November for AED90 000. The loan repayments will start on the 1st December, calculated at 5%p.a of the loan amount. Wages are paid in the month they occur, and the following information has been provided: October November December AED 18,000 AED22,000 AED25,500 The company plans to buy machinery in November for AED40 000. . The bank balance on the 1" of October is expected to be AED34,000. 6.1 Complete the cash budget for October, November and December. E3 3.4; 3.5 20 marks October November December (AED) (AED) (AED) RECEIPTS Cash sales (50%) Credit Sales (50%) Other receipts Total receipts 1 PAYMENTS Cash purchases (60%) Credit purchases (40%) Capital expenditure Wages Loan re-payment Total payments Net cash flow Opening bank balance Closing bank balance 6.2 Explain what would happen to the validity of the budget if the bank interest rate on the loan increased to 10%. Use your completed cash budget and complete the calculation below to support your answer. Show calculations wherever possible. E4 4.1; 4.2; 4.4 3 marks I Loan repayment Total payments Net cash flow Opening bank balance Closing bank balance