QUESTION 3 [25 MARKS]

AGX (Pty) Ltd forecasted the following incomes and expenditures for the half year ending 30 June 2020.

Months	Sales	Purchases	Wages	Manufacturing	Administrative	Selling
	(credit)	(credit)		expenses	expenses	expenses
2019	P	P	P	P	P	P
Nov	25,000	10,000	2,500	1,100	1,000	600
Dec	30,000	15,000	2,800	1,200	975	650
2020
Jan	20,000	10,000	2,100	1,250	1,250	550
Feb	25,000	15,000	2,175	1,150	1,150	650
March	30,000	17,500	2,375	1,300	1,300	750
April	30,000	20,000	2,575	1,350	1,350	800
May	40,000	22,500	2,775	1,450	1,450	825
June	45,000	25,000	2,975	1,500	1,185	875

Additional information

1. A sales commission of 5% on sales due 2 months after sales is payable in addition to the above selling expenses.

2. Capital expenditure-plant purchased on the 1^st of Jan for P10, 000 and was paid for immediately.

3. Bought a building in January for P80, 000, payable in 2 half yearly instalments, the 1^st payment is in February.

4. A dividend of P5,000 (net) is payable in April.

5. Period of credit allowed by creditors is 2 months and the company also allows its customers 2 months credit.

6. Wages are paid in the month they are incurred.

7. Lag in the payment of other expenses-1 month

8. Cash balance on 1 January 2020 was expected to be P37,500

Required:

Prepare a cash budget for the half year ended 30 June 2020.