Additional Practice$-$ Cash Budget

CasJet is a garment shop in Jamaica. The shop prepares quarterly cash budgets in a year.

The balance in Accounts Receivable $($debtor$)$ from June to be collected in July was $$200,000.$ The shop manager has predicted unit sales for the third quarter to be as follows:

$\backslash$table$[[$July$,450,000$ sq$.$ mtrs$.],[$August$,500,000$ sq$.$ mtrs$.],[$September$,600,000$ sq$.$ mtrs$.]]$

The selling price for the fabric is $$3$ per square meter. Cash sales account for $30\%$ of sales. Collections on account $($non$-$cash sales charged to accounts receivable$)$ are received $70\%$ in the month of the sale and $30\%$ in the following month.

All expenses and purchases are paid for in the same month they are incurred as follows:

Operating expenses is expected to be $$450,000$ each month; this amount includes $$50,000$ depreciation per month.

Purchases are expected to be $25\%$ of the expected sales each month.

The cash balance on $1$st July is $$48,000.$

Required:

For the third quarter of the year:

a$.$ Prepare the first budget you need before answering requirement $b$ below.

b$.$ Prepare a schedule of expected cash collections.

c$.$ Prepare a Cash Budget

d$.$ What is the balance of Accounts Receivable $($debtor$)$ as of the end of the quarter? Compare this amount with the sales level of September and provide your comment.