QUESTION The following projections have been made by Yellow Traders for the period ending 31 March 2022: 1. Total sales: January February March R1 450 000 R1 875 000 R1 400 000 2. Cash sales are 42% of total sales and these customers are allowed a cash discount of 4% and the balance is on credit. 3. Credit sales are collected as follows: 15% in the month of the sale 55% in the month after the sale 28% two months after the sale and the balance is written off as irrecoverable. 4. Total purchases: January February March Cash purchases 62 500 150 000 200 000 Credit purchases 250 000 300 000 325 000 A discount of 4% is received on cash purchases. Creditors are paid in full one month after the month of purchases. 5. Operating expenses amount to R51 500 for January and are paid in cash. They are expected to increase by 1.5% per month thereafter. 6. Monthly salaries amount to R80 000 per month. They are expected to increase by 8.5% with effect from 1 March 2022. 7. Rent income is R17 800 per month. The rent will increase to R19 000 on 1 March 2022. 8. An investment of R320 000 will be made at My Bank on 28 February 2022. The interest rate will be 9% per annum and paid every month starting on 31 March 2022. 9. Yellow Traders expects to have an unfavorable bank balance of R124 500 on 1 January 2022. Required: Use the information supplied to prepare the following for Silver City Traders for the three months ending 31 March 2022.

Question 3.2 Prepare Cash budget statement.