QUESTION THREE CASH BUDGET (20 Marks) Miracles LTD The information provided below was extracted from the accounting records of Miracles Ltd for the financial year ended 31 August 2020: R Sales Cost of sales Rent income Salaries and wages Advertising Taxes and rates Other operating expenses 1 350 000 380 000 30 270 180 000 85 000 4 500 225 000 Additional information: 1. Sales are divided equally each month. Sales are expected to increase by 10% for the financial year ending 31 August 2021. 2. Fifty percent (50%) of the sales are for cash and the balance is on credit. Debtors normally pay their accounts as follows: 40% in the month of sale; 55% one month after the sales. The balance is usually written off as bad debts. 3. All inventories are expected to be priced at cost plus 25%. 4. Inventories are kept at a constant level. All purchases are for cash. 5. In terms of the lease agreement, rent is received monthly. 6. Advertising is paid for monthly and is estimated to be 10% of each month's purchases (inventory). 7. Salaries and wages will increase by 12% with effect from 01 October 2020. 8. Taxes and rates are paid monthly. 9. Other operating expenses are paid for in the month in which they are incurred. 10. On 31 August 2020 the company's favourable bank balance is R 12 000. REQUIRED: Prepare each of the following for September and October 2020 from the information provided above (round of answers to the nearest whole number). 3.1 Debtors collection schedule (4 marks) 3.2 Cash budget (16 marks)