MONTH	SALES	PURCHASES
	Sh.'000'	sh. '000'
SEPTEMBER	210000	120000
OCTOBER	250000	150000
NOVEMBER	170000	140000
DECEMBER	160000	100000
JANUARY	140000	80000
FEBRUARY	180000	110000
MARCH	200000	100000

APRIL

25000

90000

The firm makes 20% of all sales for cash and collects on 40% of its sales in each of the 2 months following the sale. Other cash inflows are expected to be sh. 12million in september and april sh 15million in january and march and sh 27 million in february.the firm pays cash for 10% of its purchases .it pays for 50% of its purchases in the following month and for 40% of its purchases 2 months later.

wages and salries amount to 20% of the preceedings months sales.rent of 20 million per month must be paid.interest payments of sh.10million are due in january and april.a principle payment of sh.30million is also done in april.the firm expects to pay cash dividends of sh.20million in january and april.taxes of sh 80million are due in april.the firm also expects to make a sh.25 million cash purchase of fixed assets in december.

the firm had a cash balance of sh 22 million at the beginning of november and wishes to maintain a minium balance of sh. 15 million.

required;

a. a cash budget for the next six months november through april

b. if the firm were requesting a line of credit to cover needed financing for the period november to april,how large would this line of credit have to be?