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customers. Glover Plc is a building supplies company that sells products to trade and private Budget data for each of the six months to March
customers. Glover Plc is a building supplies company that sells products to trade and private Budget data for each of the six months to March are given below: Oct 000 Nov 000 Dec Jan Feb Mar 000 000 000 000 Credit sales 300 300 300 310 310 310 Cash sales 60 60 65 75 80 90 Credit purchases 220 230 230 250 250 250 Other operating costs 80 80 90 120 123 125 (excluding depreciation) 80% of the value of credit sales is received in the month after sale, 10% two months after sale and 8% three months after sale. The balance is written off as a bad debt. 75% of the value of credit purchases is paid in the month after purchase, and the remaining 25% is paid two months after purchase. All other operating costs are paid in the month they are incurred. Glover Plc has placed an order for four new forklift trucks that will cost 27,500 each. The scheduled payment date is in February. The cash balance at 1 January is estimated to be 25,000. Required: (a) Prepare a cash budget for each of the THREE months of January, February and March (16 marks) (b) Suggest at least two possible solutions to increase the liquidity of the company and explain your proposals
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