Question 1 DHL Industries is developing a cash budget for October, November and December. DHL Industries sales in August and September were $250,000 and $300,000 respectively. Sales of $350,000, $350,000 and $120,000 have been forecast for October, November and December respectively. Historically, 40% of the firm's sales have been for cash, 30% have generated accounts receivables collected after one month, and the remaining 30% have generated accounts receivables collected after two months. In December, the firm will receive $10,000 dividend from shares in a subsidiary. Purchases; The firm's purchases represent 30% of sales. 40% of this amount is paid in cash. 30% is paid in a month immediately following the month of purchase and the remaining 20% is paid 2 months following the month of purchase. Cash dividends; cash dividends of $20,000 will be paid in October. Rent payments; Rent of $6000 will be paid each month. Wages and salaries; The firm's wages and salaries is estimated to be 10% of that month's sales. Taxes of $25,000 must be paid in December. Non-current asset outlays; New machinery costing $120,000 will be purchased and paid for in November. Interest payments; An interest payment of $20,000 is due in December. Assuming that the firm has a cash balance of $15,000 at the beginning of October. Required a) Prepare a cash budget for the three months, October, November and December. Assuming that the firm wishes to maintain $35,000/- minimum cash balance, [25 marks] b) Determine the monthly total financing requirements or excess cash balance. [5 marks]