Skyline Limited has been trading for the past five years. They have recently realized that they are experiencing frequent cash flow issues. Their financial accountant has suggested and has begun the process of tracking the inflows and outflows of the company's cash. The following information on revenue and costs were made available to you:

Month Sales ($'000) Purchases ($'000)

October 2019 140 000 113 750

November 2019 105 000 78 750

December 2019 157 500 131 250

January 2020 87 500 61 250

February 2020 105 000 78 750

March 2020 122 500 96 250

April 2020 105 000 78 750

Additional notes:

i.The cash balance on January 01^st2020 was $26 250;

ii.20% of sales is usually attributable to cash sales while the remainder is settled:

a.One month after sales: 60%;

b.Two months after sales: 20%.

iii.2% of sales is allocated to Sales Expenses and is paid in the month of sale;

iv.50% of cost of purchases is paid in the month of purchase and the next 50% in the following month;

v.3% of purchases is allocated to Purchases Expenses and is paid in the following month after purchase;

vi.New equipment of $15 750 to be purchased in January and is to be paid in three equal instalments from the same month;

vii.Outdated equipment to be sold in February for $4 375;

viii.Salaries are $5 250 per month;

ix.Utilities will be $12 250 in January and is expected to increase by 10% each month; and

x.The firm plans to take a loan in March at an interest rate of 15% per annum. The loan amount will be $70 000. Interest is to be paid on a monthly basis equally, starting in March.

Required:

Create a cash budget for the four-month period ending April 30^th 2020