The following information relates to Rebel a retail business sport equipment.

The table below provides the sales and purchases for the company:

	Actual Sales	Actual Purchases
October 2019	$38,000	$20,000
November 2019	$41,000	$24,000
December 2019	$48,500	$29,800
	Budgeted Sales	Budgeted Purchases
January 2020	$54,000	$32,000

Additional information includes:

• Cash sales are 20% each month.
• Credit sales are expected to be collected 60% one month after sale, 20% two months after the sale and 15% 3 months after the month of sale.
• Accounts Payable is settled 40% one month after purchase and the balance is paid two months after purchase. All purchases are on credit.
• Cash payments for expenses are 10% of each months sales.
• Depreciation on the machines for January 2020 is estimated to be $2,000.
• The cash balance on 31 December 2019 is $5,400.
• The company wishes to maintain a monthly minimum balance of 10,000 and has a line of credit arrangement with Greater Bank.

Required:

(a) Prepare the Cash Budget for the month of January 2020. (b) Explain any two key changes you would make to the Cash Budget to ensure better cash management in the company.