November December January February March

Actual Actual Forecast Forecast Forecast

80 000 150 000 180 000 240 000 300 000

The cash from sales are received as follows:

o 30% in the month of sale

o 40% 1 month after sale

o 30% 2 months after sale

Purchases are 65% of sales

Cash purchases are made in the following manner:

o 20% cash in the month of purchase

o 40% 1 month after purchase

o 40% 2 months after purchase

Cash dividends of R15 000 was received in January

Rentals of R7 500 are due and paid at the end of each month

The company has 1 salaried employee who is paid each month

Wages incurred and paid equate to 8% of the previous months sales

The company bought a new machine in March for R250 000. Only a deposit of

R130 000 was due and payable in March

A provisional tax payment of R30 000 was made at the end the February

R15 000 interest was paid against the companys bank account in February

Dividends declared at the end of March amounted to R20 000. A 1st payment of

R10 000 was made on 31st of March

A loan of R80 000 was also repaid end March

The bank cash balance at the end of December is R60 000

Required:

1.1. Prepare the cash budget for the months of January, February and March