Question 2 [30] Kabelo and Thembi are the owners of Jozi Arts and Crafts. They have come to realise that effective cash management is one of the most critical responsibilities a business owner has. To improve their cash management, they decided to prepare cash budgets every quarter and approached you to assist them with the drafting of the first of these planned cash budgets. The business caters to customers who pay cash for their purchases and also extends credit to approved customers. Page 5 of Assignment SBS STADIO SUMMATIVE ASSESSMENT (ASSIGNMENT) - 2020 SECOND SEMESTER FMA 101 FINANCIAL MANAGEMENT They have prepared the following estimates of income and expenditure for April, May and June 2020 for this purpose Actual and estimated sales Actual and estimated purchases February 50 000 33 000 March 58 000 38 000 April 49 000 32 000 May 40 000 26 000 June 52 000 34 000 Additional information: Based on their experience, the owners have indicated that 60% of estimated monthly sales are for cash and the balance are credit sales. Customers settle 80% of their credit purchases one month after they have made their purchases and the remaining balances two months after the month of purchase. Debtors' payments for February and March are still outstanding. Jozi Arts and Crafts pays 50% of its monthly inventory purchases for cash. The remaining purchases are credit purchases. The business pays 40% of its credit purchases in the month following the month of purchases and the remaining balances two months after the month of purchase The business has no unpaid credit purchases for January, February or March 2020. The business also has the following planned monthly y expenses: Wages amount to R5 000 per month. The rent of the premises for the business is R8 000 per month with a contractual increase of 5% in May 2020. Monthly consumables are R1 000 and telephone costs are equal to R900 per month. The owners plan to purchase additional display cabinets at a cost of R30 000 in May. The cash balance at the end of March 2020 was R22 000. Ignore VAT and taxation Required 2.1. Prepare the cash budget for Jozi Arts and Crafts for the quarter of April to June. Note: Prepare the cash budget in the format set out in the prescribed textbook, showing all monthly amounts for all categories of receipts and disbursements. (25)