Rex intends to start up a business in IT equipment on his own account using $20,000 which he had in a savings account at the MC Bank. He will incorporate a company to start the business and also plans to approach his bank for any necessary additional finance. He provides the following additional information. (a) Arrangements have been made to purchase computers on credit for $12,000. These will be paid for at the end of March 2020 and are expected to have a five-year life. (b) The budgeted sales and purchases for the following four months will be as follows: (c) 50% of sales are expected to be paid for by cash. The remaining 50% sales are expected to be paid, equally, in the following two months. (d) 30% of the purchases are expected to be paid for in the month of purchase. 40% of the purchases are expected to be paid in the month after purchase. The remainder will be paid for two months after purchase. (e) General expenses are budgeted at $5,000 monthly, from January, and are expected to increase by 10% each month. All general expenses are expected to be paid in full in the month in which they occur. (f) Depreciation on the computers is expected to be $100 each month and cleaning expenses are expected to be $200 per month. (g) In March 2020 Rex will acquire a new delivery lorry for $20,000 and will pay 50% of the cost in same month. The remainder will be paid in equal instalments over the following ten months at an interest rate of 10% per annum. The lorry is expected to have a five-year life. Interest shall be paid as from month of acquisition. (h) Rex will make drawings of $5,000 each month, and an additional $1,000 in March. (i) Rex will have to pay for a monthly rent of $4,000 starting February 2020. (j) He expects to pay $5,000 as wages every month. (k) He expects to pay for advertising for a total of $3,000 in February and $5,000 in March 2020. Page 2 of 5 (I) The opening bank balance in February is expected to be $35,000. You are required to: Prepare a Cash Budget, for the three months starting February 2020