Brent Technologies Limited has been in business for five years. In advance of the forthcoming directors meeting in early January 2018 the CEO has decided to prepare a business plan for the three month period ending on 31 March 2018. You have been asked to prepare the following parts of the plan; (a) the cash budget, (10 marks) (b) the projected profit and loss account, (10 marks) (c) the projected balance sheet, and (10 marks) (d) comment on the potential liquidity, profitability and solvency of the company. (10 marks) The balance sheet at 31 December 2017 is as follows: 6000 2.750 Balance Sheet as at 31 December 2017 Fixed Assets 000 Equipment Current Assets Stock 4,000 Debtors 4,750 Bank 3.250 12.000 Current Liabilities Creditors 3,250 Proposed Dividends 500 3.750 Net Current Assets Total Net Assets Capital and Reserves Ordinary Share Capital Revenue Reserves 8.250 11,000 5.000 6.000 11.000 The following transactions are anticipated for the following three months: (1) Month January Credit Sales E000's 4,250 4,500 5,000 T Cash Sales Credit Purchases 000's 000's 2,500 4,000 1,250 3,500 2,00033333333,750 Cash Purchases 000's 500 250 250 February March (2) Salaries will be 300,000 per month (3) Payments to subcontractors are expected to be 20% of credit sales and paid in the month of sale. (4) Overheads are expected to be 200,000 per month (5) Debtors will pay one month after sale. (6) Creditors will be paid one month after purchase. (7) All equipment will be replaced in January 2018. The new equipment will cost 9 million and payment will be made in equal installments in February, March and April. The old equipment will be disposed of in January for 2.5 million. (8) Depreciation of the new equipment will be 10% per annum and charged to the accounts monthly (9) Half the dividends proposed will be paid in March, half in June 2018. (10) Closing stock on 31 March 2018 is expected to be 5 million