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The following information is available for Maple Limited: Month Sales Purchases Overheads June 2022 (actual) 35,500 16,400 9,400 July 2022 (actual) 42,800 15,400 8,600 August
The following information is available for Maple Limited: Month Sales Purchases Overheads June 2022 (actual) 35,500 16,400 9,400 July 2022 (actual) 42,800 15,400 8,600 August 2022 (budgeted) 38,000 17,200 15,000 September 2022 (budgeted) 39,500 16,900 15,000 October 2022 (budgeted) 40,000 20,400 9,000 The bank balance at 1 August 2022 was 22,000. Sales are 70% cash and 30% credit. Cash from credit sales is received in the month after the sale. Purchases are paid for; 0% in the month of purchase, 60% in the month following purchase, 40% one month later. " Overheads are paid in the current month. " Depreciation of 2,000 per month is included in overheads. Required a) Prepare the cash budget for Maple Limited for the 3 months ending 31 October 2022. [18 marks] b) Explain what is meant by 'sensitivity analysis' and explain what sensitivity analysis you would carry out on the cash budget of Maple Limited. [7 marks]
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