QUESTION 1 [25 MARKS] You have been provided with the following information:

The sales budgeted were as follows:

FEBRUARY	40 000
MARCH	45 000
APRIL	37 500
MAY	37 500
JUNE	40 000

Purchases were as follows:

MARCH	30 000
APRIL	27 500
MAY	22 500
JUNE	27 500

1) Debtors settle accounts as follows: 60% within the month of sale,25% the month following,15% the month thereafter.

2) All purchases are on credit and are settled 90% in the month of purchase and the balance the following month.

3) Wages are P7 500 per month and are paid in the month they are incurred

4) Overheads P10 000 per month including P2 500 depreciation, which are settled monthly.

5) Tax of P4 000 has to be settled in May

6) The company will receive settlement of an insurance claim of P12 500 in June.

7) The opening cash balance on 1st April was expected to be P15 000.

a) Prepare a cash budget for April to June (25 marks