Reference no: EM132670336

Question - Alberto Ltd is a dealer in electronic goods. The following information relates to the period July 2021 to September 2021.

1. The bank balance on 31 July 2021 is expected to be Rs45 000 (credit).

2. Sixty percent of all sales are for cash; the balance is on credit. Cash sales for June and July 2021 are expected to be R240 000 and R300 000 respectively. Cash sales are expected to increase by 5% per month while credit sales are expected to increase by 10% per month. Sixty percent of credit customers are expected to pay after one month for a cash discount of 2%. The remaining customers will pay after two months, but 5% of them are expected to be bad debts.

3. Alberto Limited sells its electronic goods at cost plus 100%. All goods that are sold each month are replaced in the same month. All purchases are on credit and creditors are paid one month after the purchase.

4. Salaries and wages are expected to cost Rs82 500 for September 2021 after a 10% increase takes effect from 01 September 2021.

5. Advertising expenses are expected to be 5% of monthly sales, and are paid one month later.

6. Equipment costing R200 000 is expected to be purchased during August 2021. A deposit of 10% will be paid in August and the balance payable in 6 equal instalments commencing September 2021.

7. A long-term loan of Rs180 000 at 12% per annum interest is to be raised on 01 September 2021. Interest is payable quarterly in advance with the first interest payment to be made on 01 September 2021.

8. Other expenses, including depreciation of Rs4 000, are expected to amount to Rs46 000 each month and payments are made monthly.

9. An interim dividend of 6 cents per share is expected to be paid on 31 August 2021. The authorised share capital of Alberto Limited consists of 800 000 ordinary shares of which 500 000 shares were issued.

Required - Prepare a Cash Budget for Alberto Limited for August and September 2021 (use separate columns for each month?