How are the credit sales revenue calculated for each month in the cash budget? I also do not understand why the inventory purchases have changed starting from March onwards.

Kahlenberg Ltd. is a wholesale business. The budgeted income statements for each of the next six months are as follows: Jan March April May 000 000 000 000 000 52 55 60 Sales revenue Cost of sales 30 31 Salaries 10 10 Electricity 5 5 3 3 Depreciation 3 2 Other overheads Total 50 51 50 53 49 expenses Profit 2 4 7 6 13 The business allows all of its customers one month's credit. Sales revenue during December totaled 60.000. The business plans to maintain inventories at their existing level until sometime in March, when they are to be reduced by 5.000. Inventories will remain at this low level indefinitely. Inventory purchases are made on one month's credit. December purchases totaled 30.000. Salaries and other overheads are paid in the same month in which they occur. Electricity is paid quarterly, i.e. in March and June. The business plans to buy and pay for a new delivery van in March. This will cost a total of 15.000 but an existing van will be traded in for 4.000 as part of the deal. The business expects to 12.000 in cash at the beginning of January Required: Prepare a cash budget for the period January-June March Jan 000 February 000 April 000 May 000 000 Receipts Credit sales revenue Payments Other overheads Salaries Electricity New Van 42 Inventory Purchases Total Expenses Cash flow Opening balance 10 (13) 18 12 Closing balance