Required: a) Prepare a projected cash flow statement for Stone Limited for each of the six months to 30 September 2021. [10 marks] b) Prepare a projected income statement for the six months (one statement with totals) to 30 September 2021. [9 marks]The following projections for the six months ending 30 September 2021 are available: 1) Sales revenue and purchases for the six months ended 30 September 2021 will be as follows: Sales Purchases E000 E000 April 160 110 May 220 120 June 240 150 July 150 90 August 160 100 September 200 140 2) Seventy per cent of sales are on credit and 30 per cent are cash sales. Credit sales are received in the following month. All purchases are on one month's credit. 3 ) Wages are $40,000 for each of the first three months. However, this will increase by 10 per cent starting July 2021. All wages are paid in the month they are incurred. 4 ) Cost of goods sold is 55 per cent of sales. 5) Administration expenses are expected to be $12,000 in each of the first four months and f14,000 in subsequent months. These figures include a monthly charge of $4,000 in respect of depreciation of non-current assets. Administration expenses are paid in the month they are incurred. 6) Selling expenses are expected to be $8,000 per month except for September 2021 when an advertising campaign costing $12,000 will be paid for. The advertising campaign will commence at the beginning of October 2021. Selling expenses are paid for in the month they are incurred. 7) A dividend of f10,000 will be proposed and paid in April 2021. 8) The business intends to purchase, and pay for, new fixtures and fittings at the end of August 2021 for f18,000. These will be delivered in September 2021. 9) Any financing gap will be filled by bank overdraft. 10) The cash tax rate is 30%.The following projections for the six months ending 30 September 2021 are available: 1) Sales revenue and purchases for the six months ended 30 September 2021 will be as follows: Sales Purchases E000 E000 April 160 110 May 220 120 June 240 150 July 150 90 August 160 100 September 200 140 2) Seventy per cent of sales are on credit and 30 per cent are cash sales. Credit sales are received in the following month. All purchases are on one month's credit. 3 ) Wages are $40,000 for each of the first three months. However, this will increase by 10 per cent starting July 2021. All wages are paid in the month they are incurred. 4 ) Cost of goods sold is 55 per cent of sales. 5) Administration expenses are expected to be $12,000 in each of the first four months and f14,000 in subsequent months. These figures include a monthly charge of $4,000 in respect of depreciation of non-current assets. Administration expenses are paid in the month they are incurred. 6) Selling expenses are expected to be $8,000 per month except for September 2021 when an advertising campaign costing $12,000 will be paid for. The advertising campaign will commence at the beginning of October 2021. Selling expenses are paid for in the month they are incurred. 7) A dividend of f10,000 will be proposed and paid in April 2021. 8) The business intends to purchase, and pay for, new fixtures and fittings at the end of August 2021 for f18,000. These will be delivered in September 2021. 9) Any financing gap will be filled by bank overdraft. 10) The cash tax rate is 30%.B.3 In recent months, Stone Limited, a retailer of enterprise computer peripherals, has experienced liquidity problems. It has an overdraft on 31 March 2021 and the bank has been pressing for a reduction in this overdraft over the next six months. The bank charges 1% interest monthly on overdraft and is paid one month later. The business is owned by the Stone family, who are unwilling to raise finance through long-term borrowing. The most recent statement of the financial position of the business is detailed below. Statement of financial position (balance sheet) on 31 March 2021 E000 Non-current assets Premises 250 Accumulated depreciation on premises (24) Fixtures and fittings 130 Accumulated depreciation on fixtures and fittings (38) 318 Current assets Inventory 142 Trade receivables 120 262 Total assets 580 Equity f1 ordinary shares 200 Retained earnings 109 309 Current liabilities Trade payables 145 Bank overdraft 126 271 Total equity and liabilities 580B.3 In recent months, Stone Limited, a retailer of enterprise computer peripherals, has experienced liquidity problems. It has an overdraft on 31 March 2021 and the bank has been pressing for a reduction in this overdraft over the next six months. The bank charges 1% interest monthly on overdraft and is paid one month later. The business is owned by the Stone family, who are unwilling to raise finance through long-term borrowing. The most recent statement of the financial position of the business is detailed below. Statement of financial position (balance sheet) on 31 March 2021 E000 Non-current assets Premises 250 Accumulated depreciation on premises (24) Fixtures and fittings 130 Accumulated depreciation on fixtures and fittings (38) 318 Current assets Inventory 142 Trade receivables 120 262 Total assets 580 Equity f1 ordinary shares 200 Retained earnings 109 309 Current liabilities Trade payables 145 Bank overdraft 126 271 Total equity and liabilities 580