Task 1 Management of Staples Pty Ltd operating in Retail business have provided you with the following information for the period 1 April 31 July 2020. You are required to use the information to prepare a Budgeted Income Statement and Cash Budget. Following a meeting with management and the business owners the following budget milestones were established. (Note: Please refer to the Extract of Policies & Procedures in Appendix A on page 7) Accounts Balances 1 April $ $ Cash at Bank 6,000 Inventories 21,800 Accounts Receivable (net) 12,000 Prepaid Rent 1,000 Furniture & Equipment 27,000 Accumulated Depreciation Furniture & Equipment 4,600 Plant & Machinery 54,000 Accumulated Depreciation Plant & Machinery 22,400 Accounts Payable 7,000 Accrued Wages 1,200 Bank Loan 48,000 Share Capital 30,000 Retained Earnings 8,600 Totals $121,800 $121,800 Budgeted Sales: April 25,000 May 27,000 June 20,000 July 23,500 Cash Sales account for 50% of sales. Credit sales are collected 40% in the month of sale and 60% in the following month. Purchases are expected to be made at the rate of 55% of expected sales for each month and are purchased on credit. The company requires the monthly ending inventory balance to be $20,000 plus 25% of the next months purchases. Creditors are paid 20% in the month of purchase and 80% in the next month. Dividends are paid by the business at the rate of $4,000 per quarter. Rent on premises is $3,000 per quarter, paid on the last day of the first month of each quarter. Wages are normally paid as incurred and this will occur in the quarter ended 30 June. In the quarter ended 31 March, pay day fell on 25th March so there are wages outstanding at 31 March and are yet to be paid. Wages are normally incurred at the rate of $5,000 per month. The following are paid as incurred: electricity $400 per month, interest on loan $180 per month and cleaning contractor $200 per month. The loan principal is paid at the rate of $2,000 per quarter. Depreciation is charged at 10% per annum on the cost of the furniture and equipment and 15% per annum on the cost of the plant and machinery. New machinery will be purchased for cash on 30th June for $10,000 Requirements:

A. In an Excel spreadsheet template provided you are required to: Complete the schedules required to:

a. Prepare a Budgeted Income Statement

b. Prepare a Cash Budget (All other budgets and schedules provided in the template must be completed).

B. Suggest 2 (two) ways to the management of Staples Pty Ltd. where the business is sensitive (prone) to changes in input data and provide 4 (four) KPIs.