At the end of Quarter $4$ in $2019,$ Necon Ltd$.$ had a bank balance of $35,000.$ Cash budgeting is

critical to the company$$s financial information needs. The following information was extracted

from the company$$s records:

$1.$ The table below provides information on budgeted sales for the periods indicated:

Budgeted Sales

$2020$ $

January $350,000$

February $220,000$

March $800,000$

April $640,000$

May $480,000$

June $735,000$

July $330,000$

August $545,000$

September $670,000$

October $465,000$

November $790,000$

December $930,000$

The company$$s records indicated that $60\%$ of the company$$s sales were for cash; and $40\%$ was

received one month after sale.

$2.$ Taxation for the year amounts to $$365,000$ was paid in even monthly payments.

$3.$ In February, a motor truck was bought for $$75,000.$ The agreement with the supplier was that

a down$-$payment of $$50,000$ would be made at purchase and the balance paid off in the last

month of the first quarter.

$4.$ The company is to receive insurance claim of $$1,800,000$ for damage done to its warehouse

during heavy rains. The amount is to be disbursed as follows: $$450,000$ in the first quarter;

$$450,000$ in the second quarter; $$450,000$ in the third quarter and the balance in the fourth

quarter.

$5.$ Investments held at National Commercial Bank will mature at the end of the year. The

amount to be collected is expected to be $$2,000,000.$ The company planned to pay dividends

to$,$ its shareholders amounting to $$150,000$ at the start of the year. It also planned to buy a

plot of land to build a new warehouse in March for $$900,000.$

$6.$ In January the company sold a motor vehicle for $$1,000,000$ to one of its staff members

while $$250,000$ written off as bad debt in $2008$ was recovered in the second month of the

first quarter this year. Rental income amounting to $$2,550,000$ per annum is budgeted for the

year.

$7.$ Operating expenses amounted to $$2,400,000$ is budgeted for the year. Included in this figure

is monthly depreciation of $$80,000.$

$8.$ Salesmen are paid commission based on the amounts collected from sales each month. The

amount is $5\%$ of sales collection each month. Miscellaneous expenses amounting to $$65,000$

monthly was not included in the operating expenses budget.

$9.$ Records from the company$$s books revealed that $70\%$ of purchases are for cash; and $30\%$ is

paid one month after purchase. The following table provides information on budgeted

purchases for the periods indicated:

Budgeted Purchases

$2020$ $

January $100,000$

February $200,000$

March $120,000$

April $400,000$

May $200,000$

June $600,000$

July $500,000$

August $400,000$

September $600,000$

October $100,000$

November $700,000$

December $900,000$

Required:

$($a$)$ A cash collection summary from sales showing cash and credit collections separately for

Quarter $1$ of $2020.(15$ marks$)$

$($b$)$ A payment summary for purchases showing cash purchases and credit purchases

separately Quarter $1$ of $2020.(15$ marks$)$

$($c$)$ A cash budget for Quarter $1($Jan $$ Mar$)$ of $2020.$ Clearly show amounts for cash sales,

credit sales, cash purchases, credit purchases and totals. $(70$ ma