Texts: Use the information provided below to answer the following questions:
INFORMATION:
The following information relates to Apricot Inc., a small retail enterprise.
Month Wages incurred, R Materials purchases, R
February 60,000 200,000
March 80,000 300,000
April 100,000 250,000
May 90,000 350,000
June 120,000 300,000
July 100,000 250,000
August 90,000 250,000
Overheads, R 100,000
Sales, R
300,000
120,000
400,000
160,000
140,000
180,000
600,000
500,000
700,000
600,000
500,000
160,000
140,000
Additional information:
1. It is expected that the cash balance on 31 May 2022 will be R220,000.
2. The wages may be assumed to be paid within the month they are incurred. It is company policy to pay suppliers for materials three months after receipt. Credit customers are expected to pay two months after delivery.
Included in the overhead figure is R20,000 per month, which represents depreciation on two cars and one delivery van. There is a one-month delay in paying the overhead expenses.
Ten percent of the monthly sales are for cash, and 90 percent are sold on credit. A commission of 5 percent is paid to agents on all the sales on credit, but this is not paid until the month following the sales to which it relates. This expense is not included in the overhead figures shown.
It is intended to repay a loan of R250,000 on 30 June. Delivery is expected in July of a new machine costing R450,000, of which R150,000 will be paid on delivery and R150,000 in each of the following two months.
Assume that overdraft facilities are available if required.
REQUIRED:
You are required to prepare a cash budget for each of June, July, and August 2022.
