Management of Staples Pty Ltd operating in Retail business have provided you with the following information for the period $1$ April $202131$ July $2022.$ You are required to use the information to prepare a Budgeted Income Statement and Cash Budget. $($For the purpose of Budget Calculation in the assessment, ignore all GST calculation$)$

Following a meeting with management and the business owners the following budget milestones were established.

$($Note: Please refer to the Extract of Policies & Procedures in Appendix A on page $7)$

Accounts Balances $1$ April $ $

Cash at Bank $6,000$

Inventories $21,800$

Accounts Receivable $($net$)12,000$

Prepaid Rent $1,000$

Furniture & Equipment $27,000$

Accumulated Depreciation $$ Furniture & Equipment $4,600$

Plant & Machinery $54,000$

Accumulated Depreciation $$ Plant & Machinery $22,400$

Accounts Payable $7,000$

Accrued Wages $1,200$

Bank Loan $48,000$

Share Capital $30,000$

Retained Earnings $8,600$

Totals $$121,800$ $$121,800$

Budgeted Sales:

April $25,000$

May $27,000$

June $20,000$

July $23,500$

$$ Cash Sales account for $50\%$ of sales. Credit sales are collected $40\%$ in the month of sale and $60\%$ in the following month.

$$ Purchases are expected to be made at the rate of $55\%$ of expected sales for each month and are purchased on credit. The company requires the monthly ending inventory balance to be $$20,000$ plus $25\%$ of the next month$$s purchases.

$$ Creditors are paid $20\%$ in the month of purchase and $80\%$ in the next month.

$$ Dividends are paid by the business at the rate of $$4,000$ per quarter.

$$ Rent on premises is $$3,000$ per quarter, paid on the last day of the first month of each quarter.

$$ Wages are normally paid as incurred and this will occur in the quarter ended $30$ June. In the quarter ended $31$ March, pay day fell on $25$th March so there are wages outstanding at $31$ March and are yet to be paid. Wages are normally incurred at the rate of $$5,000$ per month.

$$ The following are paid as incurred: electricity $$400$ per month, interest on loan $$180$ per month and cleaning contractor $$200$ per month. The loan principal is paid at the rate of $$2,000$ per quarter.

$$ Depreciation is charged at $10\%$ per annum on the cost of the furniture and equipment and $15\%$ per annum on the cost of the plant and machinery.

$$ New machinery will be purchased for cash on $30$th June for $$10,000$

Requirements:

A$.$ In an Excel spreadsheet template provided you are required to:

Complete the schedules required to:

a$.$ Prepare a Budgeted Income Statement

b$.$ Prepare a Cash Budget

$($All other budgets and schedules provided in the template must be completed$).$

B$.$ Suggest $2($two$)$ ways to the management of Staples Pty Ltd$.$ where the business is sensitive $($prone$)$ to changes in input data and provide $4($four$)$ KPIs.