Jade opens a sandwich shop. She sells sandwiches directly over the counter for cash, but also provides buffet lunches for local businesses. These customers are allowed one month’s credit.
Budgeted sales for the first six months of the business are as follows:

Purchases of bread and fillings are all made locally for cash. Expected purchases are:

1. Jade employs two assistants in the shop. Each is paid a monthly salary of \($1,000.\) This is payable on the 25th of the month.
2. Shop rent is \($700\) per month. This is paid on the first day of the month.
3. Shop heat and light costs are \($300\) per quarter, payable in arrears in March and June.
4. The bank balance on 1 January is \($1,000\) .

Required:
(a) Prepare a cash-flow forecast for the first six months of Jade’s business.
(b) Comment on changes which Jade might make in order to improve her cash flow.

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Jan Feb Mar Apr May Jun $ $ $ $ $ $ Counter sales 4,000 3,500 3,500 4,000 4,000 5,000 Buffet sales 4,000 5,000 3,000 4,000 3,500 4,000