Answer the following questions in the attachment.
Accounting 9.50 And 9.53 Preparation of receipts from accounts receivable schedule and cash budget 9.50 Rainbow Enterprises has presented the following estimates relating to 2016 activities: Quarter ending Sales revenue Purchases Cost of Sales Marketing and administration expenses Occupancy expenses Depreciation 31 March $ 600 000 $ 385 000 $ 300 000 $ 150 000 30 June $ 700 000 $ 410 000 $ 350 000 $ 150 000 30 September $ 800 000 $ 390 000 $ 400 000 $ 150 000 31 December $ 850 000 $ 420 000 $ 425 000 $ 150 000 $ 68 000 $ 68 000 $ 68 000 $ 68 000 $ 12 500 $ 12 500 $ 12 500 $ 12 500 Sales in the December quarter of 2015 were $500 000. All sales are on credit, of which 70 per cent are collected in the quarter of sales and 30 per cent in the following quarter. Purchases are on credit, and entity policy is such that all purchases are paid in the same quarter. The market and administration expenses incurred and paid are the same. Occupancy expenses incurred and paid are usually the same, except that the electricity bill (estimated to be $510) for December 2016 will not be paid until January 2017. A major IT hardware acquisition of $25 400, to be paid for in cash, is expected in the December quarter. The bank balance at 31 December 2015 was $ 18 260. Questions: A) prepare a schedule of receipts from accounts receivable showing cash collections for each quarter of 2016. B) Prepare a cash budget (on a quarter basis) for the 12 months ending 31 December 2016. C) Assess the cash position of the entity for 2016. 9.53 Ken Martin, manager of Lonnie Car Repairers, has requested that your prepare a cash budget for the months of December and January. He has provided the following information to assist in this task. Projected cash balance at the end of November is $30 000 Actual revenue for October and November and projected revenue for December and January are as follows. Cash sales Sales on Credit Total Sales October $33 000 $ 60 000 November $ 31 000 $ 80 000 December $ 42 000 $ 100 000 January $ 30 000 $ 50 000 $ 93 000 $ 111 000 $ 142 000 $ 80 000 Analysis of past records has shown that credit sales are collected over a three month period, with 50 per cent being collected in the month of the sales, 40 per cent in the next month, and the remainder in the following month. Projected expenditure during December and January is as follows: - selling and administrative expenses are budgeted to be $ 85 000 each month. - A new car hoist will be purchased for $ 100 000, with a $ 20 000 cash payment in December and the balance to be paid in March. - Ken wants to maintain a minimum cash balance of $30 000. - As more customers will want their vehicles serviced prior to Christmas, the consumables store will need more supplies. Accordingly, an order has been placed for $45 000 of inventory. This will arrive in late November and be paid in December. Questions A) Prepare a schedule showing receipts from customers for the credits sales. B) Prepare a cash budget for December and January. C) Prepare a report for Ken outlining his cash position over the Christmas period. Give advice regarding any financing requirements or investment opportunities
