QUESTION 1

Al Ayat perfumes Company is in the business of buying and selling of different types of perfumes products in different region of Oman and provided the following data to understand the cash position every month start from January to July 2020. The sales book reported the sales amount for seven months as below: -

January	February	March	April	May	June	July
36,000	39,000	39,000	38,800	26,600	29,800	41,400

The sales reported every month including cash sales and credit sales. Cash sales constitute 25% of total sales collected in the month of sales and the balance is credit sales received in the month following the month of actual sales.

The detail of goods purchased in cash during seven months reported in purchase book as below: -

January	February	March	April	May	June	July
1,000	3,500	3,600	4,200	4,800	7,400	3,800

Company also purchased goods on credit from different suppliers. The detail of credit purchase from the month January to July is given below: -

January	February	March	April	May	June	July
11,000	14,000	14,200	16,400	13,800	10,800	14,600

Cash purchases payable in the month of purchases and credit purchases are payable to supplier in two months following the month of credit purchase.

It is also found from the accounting records that the company purchased plant and equipment for RO 25,000 in the month of February and it is payable in three equal instalments starting from April. Tax department has sent a notice to the company to pay taxes of RO 5,000 each in the month of June and July.

The wages and office expenses are paid in the month following the month in which wages and office expenses incurred. The detail of wages and office expenses is given below: -

	January	February	March	April	May	June	July
Wages	4,000	3,250	3,750	4,780	3,900	3,600	3,800
Office Expenses	1,500	1,300	1,200	1,400	1,300	700	2,000

The selling expenses of the company recorded for the seven months are as follows: -

January	February	March	April	May	June	July
560	870	750	740	550	650	630

The company also incurred administrative expenses for the period January to July. The detail of administrative expenses is given as below: -

January	February	March	April	May	June	July
940	750	890	1,500	1,400	1,400	1,500

The company is paying the selling and administration expenses in one months following the month in which such expenses incurred.

The cash balance as on 1^st January is RO 20,250.

Requirement: The Company has requested you to prepare Cash budget for the period of six months (January to June). [5 Marks]