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a) Underline the main components which are considered while preparing a budget in a Company. What are the major considerations business owners should make as

a) Underline the main components which are considered while preparing a budget in a Company. What are the major considerations business owners should make as they budget and forecast? b) Prepare a Cash budget for the Quarter April To June based on the following data and additional information. Month Sales($) Purchase($) Wages($) Overheads($)

Jan 60,000 36,000 9,000 10,000

Feb 62,000 38,000 8,000 9,500

Mar 64,000 33,000 10,000 11,500

Apr 58,000 35,000 8,500 9,000

May 56,000 39,000 9,000 9,500

Jun 60,000 34,000 8,000 9,000

Additional Information: 1. Cash balance at 1st April is $800,000

2. Sales are 40% cash sales and 60% is collected in the following month.

3. All purchases of a month are paid after 2 months.

4. Land was purchased in April for $85,000

5. Wages of a month are paid the following month. All overheads are paid the same month.

6. Loan repaid in May $16,000

7. Dividend of $75,000 is expected to be received in May.

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