- Credit purchases for November were $10,000 in November and $12,000 in December

- Credit purchases are paid 60% in the month of the purchase and 40% in the following month

- Administration costs for January will be paid 50% by cash and the rest will be on credit.

- The cash balance as at 31 December 2020 is 15,000

A. Calculate the amount that is expected to be collected from accounts receivable during the month of January 2021. (2 marks)

B. Calculate the amount that is going to be paid for accounts payable for the month of January 2021. (1 mark)

C. Calculate the amount that is going to be paid for administration costs for January 2021. (1 mark)

D. If the overall amount of cash receipts over payments for January 2021 was determined to be a deficit of $4,550. What is the cash balance of John White Pty Ltd at the end of January 2021? (1 mark)

E. Based on your answer in part 4, evaluate whether the January 2021 cash position for John White Pty Ltd will be acceptable. (2 marks)

F. Provide 3 differences between a cash budget and the statement of cash flows. (3 marks)

ivial Ks John White Pty Ltd presents the following data relating to their expected operation in January 2021. January Credit sales provided Cash sales Cash received from the sale of old equipment Salaries and wages paid Depreciation on equipment Cash purchase of inventory Cash purchase of new equipment Administration costs Credit purchase of inventory $ 25 000 20 000 15 000 2 000 2 600 20 000 30 000 1 500 5 000 Additional information Credit sales for November were $20,000 and December were 15,000 Receipts from credit sales are received 50% in the same month, 30% in the next month and 20% on the following month (2 months after the sale)