The Plantd Companys budgeted sales for the first quarter of 2020 are as follows:

N$ January 400 000 February 320 000 March 480 000 Total 1 200 000

Credit sales are normally collected as follows:

Percent (%) In the month of sale 50 The month following the sale 30 The second month following the month of the sale 20

Total 100

The firms beginning balance of accounts receivable is N$150 000 and is composed of the following:

N$

From December 2019 sales 100 000

From November 2019 sales 50 000

Total 150 000

The company offers a 2% cash discount to its wholesale customers who pay their bills within the month of sale. REQUIRED: MARKS

3.1 What is a cash budget? 1

3.2 Compute the amount of sales for November and December. 4

3.3 Prepare a cash budget of cash collections for each month of the first quarter of 2020 and a total for the quarter. 13

3.4 Calculate the balance of accounts receivable at March 31, 2020. 3

3.5 Name four (4) benefits for the company of using a cash budget.