Question 3: if a cash deficit arises in any month, overdraft interest of 12.5% per month will be charged and this should be included in the cash flow statement in the following month. Funrun is a new company who are about to launch their business manufacturing children's toys. Funrun have contracts to supply a number of wholesale customers. There is no cash balance to bring forward and the finance director has not arranged an overdraft with the bank as she is expecting cash inflows in the first month of trading. You have been asked to prepare a cash flow for the first three months of trading. Budgeted Receipts and Payments for the forthcoming three months Credit and cash Sales: f July 100,000 August 120,000 September 380,000 Of these budgeted monthly sales 22% will be paid immediately in cash. The remainder for each month will be on credit with customers paying 15% in the month following the sale and 85% in the month following that Payments Total manufacturing costs 56,000 Legal fees 10,000 Design fees 22.000 Marketing (cost for 6 months) 10,200 Administration 20,100 Storage, packaging and delivery 8.00 The payments are scheduled as follows: Manufacturing costs will be paid as follows: July 20% August September 30% Legal fees will be paid in July. Required: a) Prepare a statement showing the monthly cash flow over the three-month period July to September 2021. (17 marks) b) Explain to management any issues arising from the cash flow statement you prepared. (3 marks) c) Make recommendations to management that will improve the cash position for Funrun as at 30 September 2021. (5 marks) (Total 25 marks) 50% . Design fees are incurred in July on two months credit + Payments for marketing will be spread equally across a six month period. Administration costs will be paid in equal amounts over the three months July to September. Storage, packaging and delivery will be paid as follows: 2,500 August 2.500 September 3,000 July