Reference no: EM132919593

Stephen's Exotic Snails has provided the following estimates relating to the first quarter of the financial year, the quarter beginning 1 July 2020 and ending 30 September 2020:

Cash Sales                         $75,000
Credit Sales                        $50,000
Receipts from Debtors          $60,000
Wages paid                     $55,000
Rent paid                      $20,000
Utilities paid                     $9,000
Administration paid              $15,000
Depreciation of machinery     $5,000
Receipt of Loan                   $35,000
Credit Purchases                 $65,000
Payment to Creditors               $70,000

The cash balance at 1 July 2020 is expected to be $10,500.

Required

Problem (i) Prepare a Cash Budget for the quarter ending 30 September 2020.

Problem (ii) Based on your Cash Budget, comment on whether the business can afford to purchase a new delivery vehicle for $25,000 during this quarter.