Jake has been advised by his bank manager that he ought to provide a forecast of his cash position at the end of each month. This is to ensure that his cash inputs will be sufficient to allow a bank loan to be repaid when due and to check that his outgoings are properly controlled

It is estimated that at 30 June 2023 his current account will be $5,000 in credit, whereas the amount owing in respect of the bank loan taken out on 1 July 2018 will be $15,000. Monthly deductions from the current account balance amount to $242 including interest charges on account of this loan In addition to these outgoings, Jake has to allow for the following

(1)

The payment of wages of $2,000 per mond

Personal drawings of $500 per month.

(if)

On average Jake earns a margis of 15% (of sales) and expects to sell inventory purchased in the previous month. Of the sales in any one month, 20% are paid for within that month, 70% the following month and the remainder two months after sale.

Other receipts from debtors are expected to be $40,000 in July 2023, $32,000 in August 2023 and $4,000 in September 2023.

(h)

Purchases of supplies will amount to $38,250 per month from July 2023 payable one month in arrears. In addition, purchases of $7,500 to increase inventory will be delivered in September 2023 and must be paid for in October 2023. Creditors of $34,000 for purchases made in June 2023 are to be paid in July 2023.

(F)

Monthly payments to the Revenue and Customs for the taxation of his employees" carings will amount to $500 per month.

(ri

Reat which has to be paid quarterly in advance amounts to $5,000 per annum. These parments commenced in January 2023.

(ni)

Business rates are to be paid in two instalments as due in October 2023 and in March

2018. This estimated expenditure will amount to $4,500 per annum.

Payment of Value Added Tax to H MI. Revenue and Customs of $5,000 in Juty 2023 and every third month thereafter (but see also (1x)).

(ir)

Jake intends to purchase a van for $8,150 in August 2023. He will then be eatitled to deduct 51.050 from the GST payment due to H.SI Revenue and Customs in October 2023.