Garden Sculptures presents the following data relating to the expected operations for the months of January to March 2021.

Required
(a) Prepare a cash budget on a monthly basis for the three months ending March 2021. The cash balance at 31 December 2020 is $25000.
(b) Explain how a variance report would help the owner of Garden Sculptures monitor the entity’s cash position.
(c) The following actual cash receipts and payments occur during January: receipts from accounts receivable $15 500; new equipment $22000; payments for supplies $3200; the other cash receipts and cash payments as per the budget. Prepare a variance report for January.
(d) What might have caused the lower than expected receipts from the accounts receivable amount?

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Credit services provided Receipts from accounts receivable Cash services Cash received from sale of old equipment Salaries and wages paid Depreciation on equipment Payment for supplies Cash purchase of new equipment Administration costs Credit purchase of supplies January $ 8.000 20 000 1950 8500 500 2600 20000 2 000 1900 February $12000 30 000 2250 2000 8500 500 3.500 2000 2150 March $12400 5000 3300 8500 500 2800 2000 1890