During June the company intends to make payments of $656,000,000 for freehold property, 164,000,000 for equipment and 98,400,000 for a motor vehicle. The company will also purchase an initial trading stock costing $360,800,000 on credit . opening statik The company has produced the following estimates: i. Sales for June will be $131,200,000 and will increases at the rate of 49,200,000 per month until September. In October sales will rise to $360,800,000 and this will be maintained for the subsequent months. ii. the gross profit margin on goods sold will be 25% iii. There is a risk that supplies of trading stock will be interrupted towards the end of the accounting year. The company, therefore, intends to build up its initial level of stock (360,800,000) by purchasing $16,400,000 of stock each month in addition to the monthly purchases necessary to satisfy monthly sales. All purchases of stock (including the initial stock will be on one month's credit. iv. Sales will be divided equally between cash and credit sales. Credit customers are expected to pay two months after the sale is agreed, Wages and salaries will be $14,760,000 per month. Other overheads will be 8,200,000 per month for the first four months and 10,660,000 thereafter. both types of expenses will be payable when incurred V. Sankwan Ltd was incorporated on the 1/6/06. The opening balance sheet of the company was as follows: Assets &'000 Cash at bank 984,000 Share capital 60,000ordinaary shares of $16,400 each CoDEUCC/Post-Diploma in Commerce 984,000 147 when incurred vi. 80% of sales will be generated by sales people who will receive 5 percent commission on sales. The commission is payable one month after the sale is agreed. The company intends to purchase further equipment in November 2006 for 11,480,000 cash. vii. Depreciation is to be provided at the rate of 5% per annum on freehold property and 20% per annum on equipment. (depreciation has not been included in the overheads mentioned above in (v) above) Required: Prepare a cash budget for Sankwan Ltd for the six month period to 30/11/06