Required:

a.Please make a cash budget for the months of January, February and March 1999 based on the data for: (5 Marks)

View Receivable Trend:

30% of Sales are collected in the month of sale

30% of Sales are collected after the month of sale

40% of Sales are collected two months after the sale is made

View Payable Trend:

10% of Purchases are paid for in the month of purchase

35% of Purchases are paid after the month of purchase

55% of Purchases are paid two months after the purchase is made

Additional Information:

Rent and Insurance expense were prepaid at the end of 1998

All other expenses are paid for in the month they were incurred

November Sales = 195,000

November Purchases = 100,000

December Sales = 250,000

December Purchases = 165,000

Please see attached Budgeted Income Statement for 1st Quarter 1999

b.Being a CFO of the company, interpret the importance budget in strategic and operational planning of the company

kindly Solve part a & b of this question a picture is attached to know the values and details