Question 3 Gafa Ltd have budgeted the following figures for the second half of 2009 : MonthJulyAugustSeptemberOctoberNovemberDecemberMaterialspurchased43,00037,00033,00039,00032,00030,000Wages10,0009,8009,6009,4009,2009,000Overheads16,00015,90015,80015,70015,60015,500Creditsales88,00084,00080,00076,00072,00068,000 The following information is also available: (i) Material purchases are paid TWO (2) months in arrears. (ii) 70% of wages are paid in the month the work is performed, and the remainder one month in arrears. (iii) Overheads are paid in the month they are incurred. (iv) Debtors should pay one month in arrears, but only 60% pay on time, the other 40% pay one month later. (v) A car is to be purchased in December 2009 with a cost of 30,000. Half of the cost of the car will be paid in December and the remainder in January 2010. Estimated depreciation on the car for December will be 500. (vi) The bank account at 30th September 2009 is overdrawn by 50,000. (vii) Cash sales are 2,000 a month. Required: Prepare the cash budget for the months of October, November and December 2009. [Total : 25 Marks] Page 5