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6-34 Cash budget in a trading firm. Amira Ltd is a trading company that sells mobile phones. The opening cash balance on January 1 was expected to be 30,000. The sales budgeted were as follows: November 80,000 December 90,000 January 75,000 February 75,000 March 80,000 Analysis of records shows that trade debtors settle their accounts as follow: 60% of the trade debtors pay within the month of sales 25% of the trade debtors pay the following month 15% of the trade debtors pay the month after that An extract from the purchases budget is as follows: December 60,000 January 55,000 February 45,000 March 55,000 All purchases are on credit and experience shows that 90% are settled in the month of purchase and the balance settled the month after. Wages are 15,000 per month and overheads of 20,000 per month including 5,000 depreciation are settled monthly Taxation of 8,000 has to be settled in February and the company will received settlement of an insur- ance claim of 25,000 in March. 1. Prepare a cash budget for January, February, and March 2. Comment on how management that ensure that the appropriate cash level is sustained. 3. Discuss the importance of cash budget to a business organization