Question 2 John Firey, proprietor of Ringwood Traders, has asked vow assistance in preparing his budgets for 2023. He has provided the following information: mngwood Traders Balance Sheet as at 31 December 2012 ASSETS S LIABILITIES 5 Cash 4,000 Accrued Wages 1,200 Accounts receivable 20.000 Inventory 20,000 OWNERS EQUfI'Y Rent Prepaid 18.000 Capital ~ Firefly m Equipment {book value} m M M 1 John expects to sell the following amounts for the three [3] months ending 31'l March 2023: Months Units January 1,200 February 1,500 March 1,300 Estimated sales for the quarter ending June 2023 = 3750 units. 2 The product has a current cost price of $25.00. The inventory policy of Ringwood Traders is to maintain stock levels to 20% of the following quarter's sales. Purchases of stock are made on credit and paid in the month they are incurred. 3 The selling price will be $45.00 for the first quarter. It will rise on the 15t April in line with the purchase price increase. It is estimated that 15% of the sales are cash and the rest is for credit. All credit sales are expected to be collected in the month following the sale. 4 Equipment will be depreciated at 15% on book value. 5 John Firefly will withdraw $4,000 per month. 6 The following expenses have been paid each quarter: Wages $30,000 Telephone 5340 Delivery Fees 5600 7 It is estimated that accrued wages at the end of each quarter will be $2,400. 8 Commission of 3% of the sales value for the quarter is to be paid. 9 The rentis $24,000 p.a. and is paid every lst October. prep are caSh bUd 9 et