The following data has been estimated for Macquarie Machinery, who commenced business on 1 August 2013.
• Estimated total sales:
August .................................. $55 000
September .............................. $50 000
Cash sales are estimated to be 20% of total sales.
• Debtors are expected to pay:
50% in the month of sale
48% in the month after the sale with the balance owing never collected.
• Estimated purchases:
August ................................$30 000
September ............................$36 000
• All purchases are to be on credit and are to be paid for in the month following the purchase.
• Estimated operating expenses are:
- Freight outwards 15% of total sales, paid in cash.
- Office salaries, August $9000, Sept. $11 600, paid in cash.
- Depreciation of equipment 25% per annum on $250 000. (The equipment was purchased on credit.)
• Other information:
- The owner contributed $85 000 cash to the business on August 1, 2013.
- The owner intends withdrawing $3000 per month for private use.
- The accountant of Macquarie Machinery estimates the firm will need a minimum cash balance of $15 000 in order to maintain liquidity.
Required:
a) Prepare a schedule of expected receipts from debtors for August and September 2013.
b) Prepare a cash budget for the two months ended 30 September 2013 showing the expected cash balance at the end of each month. (It is not necessary to show a total column for the two months).

c) On 30 September 2013 an installment of $100 000 will be due on the new machinery. Will Macquarie Machinery be able to pay the installment? Explain.