Amber Ltd is preparing its Cash Budget for the three months ending 31 March 2007. The following forecasts are available.

The following information is also available.

	SALES	PURCHASES	WAGES	GENERAL EXPENSES
Dec-06	240, 000	1,50,000	24,000	45,000
Jan-07	2,50,000	1,60,000	24,000	45,000
Feb-07	2,60,000	1,90,000	26,000	45,000
Mar-07	245, 000	155, 000	28,000	45, 000

1) All purchases are on a credit basis and are paid for one month after purchases are made.

2) 40% of sales are on a cash basis. The remainder are paid one month after sales are made.

3) General expenses include depreciation of 2,000 per month. General expenses are paid one month in arrears.

4) 75% of wages are paid in the month they are earned, and 25% are paid during the following month.

5) The company intends to purchase new equipment at a cost of 30,000 in December 2006, with 10% payable on 15 January 2007 and the balance on 15 March 2007. Old equipment originally costing 10,000 is to be disposed of for 1,000, to be received during February 2007.

6) The budgeted bank balance on 1 January 2007 is 48,000.

REQUIRED

(a)The Cash Budget for Amber Ltd for the three months ending 31 March 2007.[20 marks]

(b) Explain Break even point with the help of pictorial representation [4 marks]