QUESTION 4 (25 Marks) EDN ENTERPRISES CASH BUDGET FOR PERIOD 01 MARCH TO 31 APRIL 2022 March April R R Cash receipts 1 526 125 1 350 000 Cash sales Receipts from debtors Fixed deposit Interest on fixed deposit 750 000 625 000 150 000 1 125 600 000 750 000 - - Cash payments (2 125 000) (2 212 500) Cash purchase of inventory Payments to creditors Drawings Salaries Equipment Other cash operating expenses 500 000 475 000 125 000 525 000 125 000 375 000 512 500 550 000 125 000 525 000 100 000 400 000 Cash surplus (shortfall) (598 875) (862 500) Opening cash balance (98 625) (697 500) Closing cash balance (697 500) (1 560 000) Additional information Cash sales make up 40% of the total sales. The balance of the sales is on credit. Credit terms to customers are 30 days. Budgeted sales for February 2022 are R1 500 000. 4.1 REQUIRED Study the cash budget and additional information provided below and then answer the following questions: 4.1.1 Calculate the budgeted total sales for March 2022. (2 marks) 4.1.2 Calculate the interest rate on the fixed deposit, if the monthly interest for March 2022 of R1 125 is earned on the fixed deposit balance of R150 000. (2 marks) 4.1.3 Comment on the cash budget and provide recommendations, where applicable. (8 marks) INFORMATION 4.2 REQUIRED Study the statement of cash flows provided below and answer the following questions: 4.2.1 What was the carrying value of the equipment that was sold? (2 marks) 4.2.2 If the cash balance on 30 June 2020 was R5 000 (unfavourable), what was the cash balance on 01 July 2019? (1 mark) 4.2.3 Comment on the cash flows of the company with particular reference to the cash flows from operating activities, increase in inventory, increase in receivables, disposal of non-current assets and increase in long-term borrowings. (10 marks) INFORMATION PULSAR LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 R Cash flows from operating activities (450 000) Profit before interest and tax/Operating profit 1 000 000 Non-cash flow adjustments 180 000 Depreciation Profit on disposal of equipment 190 000 (10 000) Profit before working capital changes Working capital changes 1 180 000 (1 000 000) Increase in inventory Increase in receivables Increase in payables (800 000) (400 000) 200 000 Cash generated from operations 180 000 Interest paid (50 000) Dividends paid (200 000) Company tax paid (380 000) Cash flows from investing activities 120 000 Proceeds from disposal of equipment 120 000 Cash flows from financing activities 400 000 Increase in long-term borrowings 400 000 Net increase in cash and cash equivalents 70 000