QUESTION 3 REQUIRED (25 Marks) Use the information given below to answer the following questions: 3.1 Prepare the Cash Budget for January, February and March 2022. (22 marks) 3.2 Comment on the cash position of the company for the budgeted period. (3 marks) INFORMATION 1. Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are as follows: Current assets Accounts receivable Bank Current liabilities Accounts payable (for material purchases) Other current liabilities R 1 300 000 235 000 95 000 700 000 2. The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): 2.1 The sales manager anticipates the following credit sales: February 2 340 pallets March January 2 160 pallets 2250 pallets The bricks are sold at a constant price of R500 per pallet. Ten percent (10%) of the sales are for cash and the rest is on credit. Debtors pay their accounts one month after the sale is made. 2.2 The costs of production include the following: Direct materials Direct labour Variable manufacturing overheads R0.14 per brick R0.08 per brick R0.04 per brick 2.3 The purchases manager expects to purchase materials to manufacture the following number of pallets each month: January 2400 February 2600 March 2500 No inventories of materials are held at the end of each month. QUESTION 3 REQUIRED (25 Marks) Use the information given below to answer the following questions: 3.1 Prepare the Cash Budget for January, February and March 2022. (22 marks) 3.2 Comment on the cash position of the company for the budgeted period. (3 marks) INFORMATION 1. Some of the items in the Statement of Financial Position as at 31 December 2021 of Lomax Ltd are as follows: Current assets Accounts receivable Bank Current liabilities Accounts payable (for material purchases) Other current liabilities R 1 300 000 235 000 95 000 700 000 2. The following forecasts have been made by Lomax Ltd for the first three months of 2022 for the bricks that it produces which are sold in pallets (with each pallet comprising 500 bricks): 2.1 The sales manager anticipates the following credit sales: February 2 340 pallets March January 2 160 pallets 2250 pallets The bricks are sold at a constant price of R500 per pallet. Ten percent (10%) of the sales are for cash and the rest is on credit. Debtors pay their accounts one month after the sale is made. 2.2 The costs of production include the following: Direct materials Direct labour Variable manufacturing overheads R0.14 per brick R0.08 per brick R0.04 per brick 2.3 The purchases manager expects to purchase materials to manufacture the following number of pallets each month: January 2400 February 2600 March 2500 No inventories of materials are held at the end of each month.