The Golden Oranges Nursery, which provides facilities for pre$-$school children on a

commercial basis, is preparing its cash budget for next year. A profile of the estimated

revenues and expenses for the first four months of the financial year is as follows:

The following additional information is available:

At the beginning of June, it is estimated that the nursery's bank account will be

overdrawn by $4,000$

In addition to receipts from Fees, the nursery will receive a loan of $5,000$ from

one of its owners in July, and sale of unwanted toys and equipment will raise

$1,500$ cash in August.

$70$ percent of the Fees are received in the month in which they fall due, the

remaining $30$ per cent are collected in the following month. This pattern is

expected to continue throughout the year.

Purchases of Food & Supplies will be paid in the month incurred.

The purchase of Equipment is on credit and will be paid for in the month

following purchase.

All other costs will be paid for in the month incurred.

Required:

$($a$)$ Prepare the Golden Oranges Nursery$$s cash budget for each of the first

three months of the next financial year through to $31$st August $20$X$0.$

$(30$ Marks$)$

$($b$)$ What is the objective of preparing a cash budget?

$(5$ Marks$)$

$($c$)$ Briefly discuss the benefits and criticisms of budgets.

$(5$ Marks$)$