QUESTION ONE

The following budgeted information was supplied by Mini Projects for their small projectsportfolio:

A balance as per bank amounts to R$200000$ is expected on $31$ May.

The expected monthly projects are as follows:

The revenue per project is $R300.$

Cash revenue usually make $60\%$ of the total revenue. The balance of the revenue is oncredit. Debtors pay

in the month after the invoice.

Purchases are expected to be as follows:

Forty percent $(40\%)$ of the purchases is for cash and the balance is paid for in the followingmonth.

Labour costs amounts to $R70$ per project and are paid in the month in which they are incurred.

Manufacturing overheads are budgeted at R$74000$ per month, excluding R$6000$ for depreciation on

machinery. Manufacturing overheads are payable in the month in which they are incurred.

Administration costs contain a fixed portion of R $80000$ per month and a variable component of $20\%$ of the

monthly revenue value. These costs are paid by the end of the applicable month.

Equipment with a cost price of $R700000$ is to be purchased during June. A deposit of $20\%$ of the purchase price

will be paid in the month of the purchase and the balance plus finance charges of $R40000$ will be paid in twelve

equal monthly instalments commencing July.

Required:

Prepare the Cash Budget for June, July and August using separate columns for each month.