Total Sales See note 1. 110,000 130,000 180,000

Receipts from Accounts Receivable To calculate - See note 2.

Wages 30,000 35,000 40,000

Office Equipment 0 7,000 0

Lease Prepayment for 2021 0 0 4,000

Administrative Expenses 3,000 3,000 3,000

Accrued Expenses 0 0 8,000

Depreciation on Office Equipment 7,000 8,000 8,000

Maturing of Term Deposit 8,000 0 0

Credit Purchases 70,000 80,000 90,000

Payments of Accounts Payable To calculate - See note 3.

Drawings 3,000 4,000 5,000

Notes

1. 30% of total sales are cash sales. 70% of total sales are on credit.

2. Actual receipts from Accounts Receivable are 80% of the previous months credit sales and the balance of 20% owing is received in the following month. For example if we had credit sales of $100,000 in January, we would expect to receive $80,000 in February and $20,000 in March. Actual credit sales were $70,000 in both August and September 2020.

3. Credit purchases on Accounts Payable are paid 60% in the month of purchase and the remaining 40% in the month following. Credit purchases in September 2020 were $60,000.

4. Garden Supplys cash balance at 1 October 2020 was $555.

Required

Prepare a month by month cash budget for the quarter ending 31 December 2020 and comment briefly on the monthly cash position.