Quarter ending

31-Mar 30-Jun 30-Sep 31-Dec Sales revenue 600,000 700,000 800,000 350,000

purchases 385,000 410,000 390,000 420,000

cost of sales 300,000 350,000 400,000 425,000

marketing and administration exp. 150,000 150,000 150,000 150,000

Occupancy expenses 68,000 68,000 68,000 68,000

depreciation expenses 12,500 12,500 12,500 12,500

Sales for the December quarter 2015 were $500,000. All sales are on credit, of which 70% are collected in the quarter of sale and 30% in the following quarter. Purchases are on credit, and entity policy is such that all purchases are paid for in the same quarter. Occupancy expenses incurred and paid are usually the same, except that the electricity bill(estimated to be $510) for the December 2016 will not be paid until January 2017. A major IT hardware acquisition of $25,400 to be paid for in cash, is expected in December quarter. The bank balance at 30 December 2015 was $18,260.

Required:

A. Prepare a schedule of receipts from accounts receivable showing cash collection for each quater of 2016.

B. Prepare a cash budget (on quarterly basis) for the 12th months ending 31 December 2016.

C. Assess the cash position of the entity for 2016.