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Question Three (3a) Rockland Limited is a constructional materials retail company in Bolgatanga. Rockland Limited projected purchase and sales for the second half of 2019

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Question Three (3a) Rockland Limited is a constructional materials retail company in Bolgatanga. Rockland Limited projected purchase and sales for the second half of 2019 are given below: Sales Purchases GH GH July 180,000 120,000 August 200,000 150,000 September 140,000 100,000 October 290,000 200,000 November 230,000 180,000 December 360,000 250,000 Other information is as follows: 1. The company has three bills payable of GH100,000, GH 150,000 and GH90,000, which are to be paid in July, September and October respectively. 2. Fixed Assets will be bought in August and October at GH200,000 and GH300,000 respectively. 3. The company pays 50% of trade creditors in the month of purchases, 25% in the second month and 20% in the third month, the remaining 5% being cash discount 4. The cashbook balance at the end of August is expected to be GH25,990 5. Operating expenses are GH35,000 per month and are paid for when they are incurred. 6. The minimum monthly cash balance required should be GH10,000 and funds can be borrowed in multiples of GH10,000 to make up for any deficiency from the bank. 7. The company expects to receive dividends from investments of GH150,000 and GH200,000 respectively in August and September. 8. Credit customers are usually allowed 27% cash discount on the if payment is made promptly, 1% cash discount on the 15th day after sale and no discount in 30 days' time. A penalty of 5% is payable on all debts due and unpaid after the end of the first month. Usually, 60% of sales are paid promptly, 20% within 15 days on sale, 15% by 30 day's time and the remainder in the second month after sale. 9. Depreciation cost will be constant per month at GH 12,000 10. Borrowed funds are payable immediately cash is available. Required: Prepare a month-by-month cash budget for September, October, November and December 2019

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