Case Study 2 Budgeting Ahead 0n 1 April 2020, Kimin is attempting to budget cash flows through 30 June 2020. On this latter date, the principal ofa secured bank loan. 55 million. will be payable. This bank loan was secured at 3.5% per annum. Cash Interest payment on this loan are settled monthly. An interim cash dividend of$6 million will be due end of June. The company only transact on credit sales. A discount of 6% is given to all customers who pay within one month. 20% of the accounts receivable will be received in the month of sale. 20% will be collected in the following month, and the remaining will be received in the month after next. There is a 5% provision for bad debt for accounts receivable in the month after the next. Projected and Actual Sales are: Projected Sales (5} Actual Sales {5} January 15 600 000 January 15 850 000 February 15 600 000 February 16 450 000 March 17 600 000 17 280 000 April 18 200 000 May 17 500 000 June 16 600 000 July 15 500 000 July For the Year ending 200 000 000 For Year to Date 49 580 000 31 Dec Purchases are made on basis of?0% the following month's projected sales. 50% ofthe purchases are paid for in the month of purchase, and a 5% prompt settlement discount is received. The remainder is paid in full the following month. Total budgeted fixed operating expenses for the year are $40 million Fixed costs are accrued evenly through the year. The operating variable costs is determined to be 10% of that month's projected purchases, which accrued evenly with purchases. Both fixed and variable operating expenses are paid in the month incurred. Opening cash balance as at 1 April is $25 500 000