ws c) Cash Budget October November December Fourth Quarter Cash Receipts from Sales Less Cash payments: Cash pay for purchase Cash pay for other expenses Total Payments =Net cash from operations Add: Beginning Cash balance =Ending Cash balance a) Sales Budget October November December Fourth Quarter Budgeted sales units - Fruit Tea 250 290 580 Selling price per unit $26 $26 $26 Budgeted sales revenue Fruit Tea Budgeted sales units Cacao Chai Tea Selling price per unit Budgeted sales revenue - Cacao Chal Tea Budgeted total sales revenue I Expected cash collections: b) Other Expenses Budget October November December Fourth Quarter $2,800 $2,800 $2,800 $8,400 Rental expense Salaries and wages expense Other general expenses $3,000 $3,000 $3,000 $9,000 $1,500 $1,500 $1,500 $4,500 Total Other Expenses $7,300 $7,300 $7,300 $21,900 Expected Cash Payments for Other Expenses Page 12 D Focus 20 1200 1. Budgeting: 13 marks Tea Lover business is a small retail business that sells two unique types of tea, Fruit Tea and Cacao Chai Tea. The Tea Lover business sells Fruit Tea for $26 per box and Cacao Chai Tea for $30 per box. In the fourth quarter of 2021, the business forecasts to sell: 200 Budgeted sales units October November December Fruit Tea (in box) 250 290 580 Cacao Chai Tea (in box) 230 460 All sales revenue are cash sales, i.e., the business receives cash from customers when the sales are made. The business has prepared the following purchase budget for the fourth quarter: Total purchases cost Expected Cash Payments October $4,960 $4,960 November $6,860 $6,860 December $9,720 $9,720 The business also expects to incur the following selling and general expenses for each month of this year. These expenses must be paid in the month that they are incurred. Rental expense $2,800 per month Salary and wages expense $3,000 per month Other general expenses including power Tohone, water, internet, insurance cost etc $1,500 per month Required: (a) Prepare a sales budget for the fourth quarter of 2021. (4 marks) 2021. (b) Prepare an other expenses budget for selling and general expenses for the fourth quarter of (2 marks) (C) Prepare a cash budget for the fourth quarter of the year, assuming that at the beginning of October 2021, the business has a cash balance of $3,000. (4 marks) (d) Would the cash balances drop by 5% if the total sales revenue drops by 5% for the three months? Explain without any calculation