QUESTION $1($CLO $4)[35$ Marks$]$

Cash Back Limited has recently hired you to assist in their budget preparation for $2024$ and have provided you with the following information:

i$.$ The opening cash balance on $1$st January $2024$ was expected to be $$700,000.$

ii$.$ The sales budgeted were as follows:

Months $

November $500,000$

December $550,000$

January $450,000$

February $470,000$

March $500,000$

N$.$B$.$ Analysis of the records shows that debtors settle according to the following pattern $70\%$ within the month of sale, $20\%$ the month after and $10\%$ the following month.

iii. Extracts from the purchases budget were as follows:

Months $

December $375,000$

January $343,000$

February $281,000$

March $343,000$

N$.$B$.$ All purchases are on credit and experience shows that $80\%$ are settled in the month of purchase and the balance settled the month after.

iv$.$ Wages of $$40,000$ per month and overheads of $$50,000$ per month $($including $$15,000$ depreciation$)$ are settled monthly.

v$.$ Taxation of $$25,000$ has to be settled in February and the company will receive settlement of an insurance claim of $$45,000$ in March.

vi$.$ Investments held at JMMB will mature in February $2024.$ The amount to be collected is expected to be $$150,000.$ The company planned to pay dividends to its shareholders amounting to $$200,000$ in March $2024.$

vii. In December $2023,$ the company sold a motor vehicle worth $$450,000$ to one of its staff members for which it was agreed that payments would be made in equal installments over a three$-$month period starting January $2024.$

viii. $$100,000$ written off as bad debt in $2023$ is expected to be recovered and paid in February $2024.$ Rental income amounting to $$1,500,000$ per annum is budgeted for $2024($to be collected monthly$).$

ix$.$ Salesmen are paid commission based on the amounts collected from sales each month. The amount is $10\%$ of sales collected each month.

Prepare:

$($a$)$ A cash collection summary from sales, showing cash and credit collections separately for January, February and March of $2024.(5$ marks$)$

$($b$)$ A payment summary for purchases showing cash purchases and credit purchases separately for January, February and March of $2024.(5$ marks$)$

$($c$)$ A cash budget for January, February and March of $2024($Total Column to be included$)$

$(25$ marks$)$