Required:

Prepare the cash budget of LMN Traders for April and May 2018.

[20] QUESTION FOUR The following information pertains to LMN Traders for three months ended 31 May 2018. May Sales (20% for cash and 80% on credit) Purchases (10% for cash 90% on credit) Salaries and wages paid Cash expenses Depreciation Actual March R 360 000 240 000 40 000 24 000 2000 Budgeted April R R 380 000 400 000 280 000 320 000 60 000 60 000 28 000 32 000 2000 2000 Additional Information: 1) It is expected that debtors will settle their accounts as follows: 20 % in the month of sale 70 %in the month after the month of sale, and 5% in the second month after the month of sale 2) The remaining 5% is usually written off as bad debts. 3) Trade creditors are paid in the month after the purchases at a discount of 5%. 4) 50% of the salaries and wages are weekly wages. Because wages are paid weekly, usually 10% of the wages are paid in the month following the month in which they were incurred. 5) Expenses are paid as they arise. 6) The favourable bank balance on 1 April 2018 was R 21 000