The management accountant at Genus Manufacturing Company, Karen Cranston, is in the process of preparing the cash budget for the business for the second quarter of 2020. Extracts from the sales and purchases budgets are as follows: Month 2020 Cash Sales Sales On Purchases On Account Account February $45,000 $480,000 $390,000 March $60,000 $600,000 $360,000 April $48,700 $720,000 $450,000 May $97,400 $640,000 $400,000 June $151,000 $800,000 $500,000 i) An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern, in accordance with the credit terms 5/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale Accounts payable are settled as follows: ii) 60% in the month in which the inventory is purchased 40% in the following month The credit terms of the suppliers - 4/30, n60. iii) Computer Equipment costing $280,000 will be purchased and paid for in June 2020. iv) v) During June, the management of Genus Manufacturing Company expects to sell an old motor vehicle that cost $500,000 at a gain of $60,000. Accumulated depreciation on this motor vehicle at that time is expected to be $360,000. The employee will be allowed to pay a deposit equal to 65% of the selling price in June and the balance settled in two equal amounts in July & August of 2020. A long-term bond purchased by the company with a face value of $500,000 will mature on April v) A long-term bond purchased by the company with a face value of $500,000 will mature on April 30, 2020. On that date quarterly interest computed at a rate of 12% per annum is also expected to be collected. vi) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $3,180,000 per annum, [including depreciation on non-current assets of $85,000 per month] and is settled monthly. Review Question _Cash Budgets Page 1 vii) Other operating expenses are expected to be $225,000 per quarter and are settled monthly. viii) Wages and salaries are expected to be $2,604,000 per annum and will be paid monthly. ix) x) xi) xii) A compensation payment of $460,000 to a former employee for damages sustained in an industrial accident, not covered by insurance, becomes due and payable in April. The owner of the business Suzette Genus expects to collect settlement from an insurance claim for $249,875. The cheque is expected to be disbursed on April 15, 2020. Immediately upon receipt, Genus plans to invest the full amount in the business. A member of the management team of Genus Manufacturing has negotiated with a tenant to rent office space to her beginning May 1. The rental is $1,020,000 per annum. The first month's rent along with one month's safety deposit will be collected on May 1. Thereafter, the monthly rental is expected to be received at the beginning of each month. The cash balance on March 31, 2020 is expected to be an overdraft of $170,000 Required: (a) (b) (c) (d) Prepare a schedule of budgeted cash collections for sales on account for each of the months April to June. Prepare a schedule of expected cash disbursements for purchases for the quarter ending June 30, 2020. Prepare a cash budget, with a total column, for the quarter ending June 30, 2020, showing the expected cash receipts and payments for each month and the ending balance before financing for each of the month . Companies in the industry in which Genus Manufacturing operates are required to maintain a minimum cash balance of $140,000 each month. Genus Company is very keen on keeping the gearing of the company as low as possible and would therefore prefer to finance the business using equity financing. In light of the company's desire, suggest four (4) possible internal measures that may be employed by management to address any expected shortfall reflected in the budget prepared in part (c) above