Reference no: EM132632294

Question - Cash Budget

Flex Group has the following projections for the year 2020

1. Sales

January: 110 000

February: 120 000

March: 140 000

April: 143 000

2. 70% of the sales will be on credit

3. Credit sales will be collected as follows:

50% will be collected on the month of the sale

30% will be collected on the second month

15% will be collected on the third month

5% will be written off

4. Purchases will be as follows:

January : 90 000

February : 87 000

March : 93 400

April : 86 500

5. 90% of Purchases are on credit

6. Purchases will be paid as follows:

70% on the month of purchase

15% on the second month after purchase

15% on the third month after purchase

7. Favourable bank balance on January 2020 of : 56 000

8. Salaries will be paid at 15 000 on January and 10% increase thereafter per month

9. Purchase of equipment of March 2020 : 45 000

10. An investment of 15 000 will be made by the Flex Group on February 2020

REQUIRED -

1. Draw up a projected debtors schedule of Flex Group for February, March, April and May 2020.

2. Draw up a projected purchases schedule of Flex Group for February, March, April and May 2020.

3. Draw up the cash budget of Flex Group for February, March, April and May 2020.