In view of the finding requirements highlighted by the Cash Budget, outline the actions that

you may take to ensure that you meet the demands of the CEO and also that the company does not break its overdraft limit (5 Marks).

following information is available to assist the preparation of the Cash budget for the three onths to 31 August: i. The opening cash balance is 25,250, as at June 1st. ii. The new test equipment is estimated to cost 120,000 with 10% deposit payable in June, the balance is payable on installation in July. iii. The Operations Director expects that direct labour costs will run at 36,000 per month, rising to f39,000 in July due to the overtime necessary to install the new equipment and then will return to its original level in the subsequent months. iv. Monthly salaries for Selling \& Distribution staff are f11,500; other marketing costs are expected to be f5650 per month, except August, when an extra f5200 will be spent on an annual trade exhibition. v. Fixed assets are depreciated on a straight-line basis with a fixed monthly charge of 10,500. vi. Salaries for General \& Administration staff are expected to be 12,400 per month. vii. The company's annual profit-sharing bonus scheme for all staff is due to be paid out in July as well - a total cost of 22,000. viii. Monthly overheads are expected to be {38,000. ix. The company is also due to pay 45,000 of corporation tax in June. x. Trade creditors on 1tt June amount to 242,000 with the following monthly profile. xi. Projected purchases from suppliers for the three months are (the company has a policy of paying its suppliers including creditors within 60 days): xii. Trade debtors have the following monthly profiles (debts are settled in cash in the month due)