SECTION B (25 MARKS) - CASE STUDY Read the following case study and answer the questions that follow: Question 1 (25 marks) 1 () A company's main business is the wholesaling of various consumer goods to retailers. The business is located in the Gauteng province. You are presented with the following financial information: 1. 2. A cash balance of R150 406 was on hand at the end of January 2021. Sales and purchases for December 2020 and January to March 2021 are presented as follows Sales December January February 1 1 550 000 1 120 000 1 200 000 1 050 000 810 000 900 000 200 000 210 000 7 March 1 350 000 921 000 7 7 Purchases Wages and salaries Operating expenses (including depreciation) 50 000 52 000 ? 3. Cash sales amount to 40% of sales, while credit sales account for the balance. Debtors pay their accounts as follows: 5. : Two-thirds at the end of the first month after the sale The balance is paid at the end of the second month after the sale The company pays an immediate 10% deposit on purchases, and the balance is paid equally over the next three months Operating expenses indude a fixed amount of depreciation of R10 000 per month for each of the five months stated above. Operating expenses are expected to increase by 5% in February and by another 5% in March Salaries and wages are expected to increase by 8% in February however, they are expected to reduce by 2% in March 6. Har Education Introduction to Management Accounting MACOS Signe March 2023 Page 5 of 7. A new vehicle was purchased in December 2020 for R330 DOD on hire purchase. The company deposited a cash amount equal to 20% of the cost price of the vehicle at the end of December, and the remainder of the cost will be paid in equal instalments over the next 12 months starting at the end of January Required: 1.1 Using the templete provided, prepare the monthly cash budget of the company for the period of February and March 2021 (20) Note to student: the following presents a template for a cash budget of a company for February and March. Copy it onto your answer sheet and use it to answer the question above. February March Cash receipts/money coming in Cash payments/money going out Cash surplus/(deldt) Bank balance at the beginning Bank balance at the end