QUESTION 2 [25 MARKS] The directors of Cashmore Ltd provide the following budgeted information. Revenue Purchases Administration Costs 2016 $ $ $ January 24 000 14 000 6 300 February 26 000 17 000 6 200 March 30 000 18 000 6 200 April 26 000 15 000 6 800 May 28 000 19 000 7 100 June 32 000 13 000 6 700 Other information is as follows: 1. 10% of all revenue are cash sales 2. 50% of credit customers pay in the month following the sale. Remaining trade receivables pay in the second month following the sale 3. All purchases are on credit and are paid for in the month following purchase. 4. The business rent is $9000 a year. This is paid in two instalments on 1 April and 1 October each year. 5. A dividend of $3100 is expected to be paid on 20 March 2016 6. Administration costs are paid in the month in which they are incurred. 7. The company expects to take out a bank loan of $10 000 with an interest rate of 6.5% per annum on 1 May 2016. This is to help finance the purchase of a new vehicle in May which is expected to cost $12 000. The loan is to be repaid in full together with the interest after one year. 8. The sales proceeds from disposal of the old vehicle in June 2016 are anticipated to be $1100. 9. It is expected that there will be a bank balance of $1200 on 1 March 2016 Required Prepare a Cash Budget for each of the four months March to June 2016