Austral Ltd is preparing a cash budget for May and June of 2019. Past records reveal that 10% of all credit sales are collected during the month of sale, 50% in the month following the sale, 30% in the second month following the sale and 10% in the third month following the sale. The company pays for 65% of purchases in the month after purchase, and the balance is paid in the month following that. Selling expenses amount to $3 600 per month plus 15% of monthly sales. Administrative expenses are estimated to be $12 200 per month, which includes $3 800 of depreciation expense. Finance expenses are $1200 per month. All selling and distribution, administrative, and finance and other expenses (except depreciation) are paid for when incurred. It is planned to purchase equipment during May 2019 at a cost of $5 200. A $6 000 loan payable will be repaid in full including interest charges during June 2019. The interest due at the maturity date will be $1 250. The company's expected Cash at Bank balance at 1 May 2019 is $17 200. Estimated sales and purchases data are as follows. Sales Purchases 2019 February March April May June $75000 66 000 88 000 60 500 71 500 $38500 33 000 55000 27500 38500 Required: (a) Ignoring GST, prepare a cash budget for May and June 2019, by month and in total. (b) Discuss why preparing a Cash Budget is important for maintaining & monitoring cash adequacy in an organisation. Provide four (4) reasons in support of your answer. (a) Cash Budget for May and June 2019 May June Total Beginning cash at bank balance Expected cash collections: 3rd preceding month (10%) 2nd preceding month (30%) 1* preceding month (50%) Current month (10%) Total expected cash flows Total cash available Expected cash payments: Purchases: 1* preceding month (65%) 2nd preceding month (35%) Selling expenses Administrative expenses Financial expenses Equipment purchase Loan payable and interest Total cash payments Ending cash at bank balance b) Insert your answer here