17:06 W @ - B @ &2l 95%m This document contains ink, shapes and image... v Task 6 The following are the actual results for May and June and budgeted results for July, August and September of Dream Big Pty Ltd. May June July Aug Sept Total Purchases $45,000 | $48,000 | $46,000 | $47,000 | $44,000 Total Sales $80,000 | $77,000 | $81,000 | $85,000 | $82,000 Purchases are paid for 75% in the month of purchase and 25% in the following month. Other costs amount to $34,500 per month are paid in cash. 30% of sales are cash sales. Credit sales are invoiced on the last day of the month. Of the credit sales, 65% are collected within one month of the invoice date and the remaining are collected during the second month after invoice date. The cash balance on 30 June is $12,495. The desired cash balance of the business is $13,000 from July 31. If the business will be short of this, then it will take a bank overdraft and when the business has sufficient cash balance it will pay off its liabilities. Required: Read the information above to establish/confirm the budgetary milestones and performance indicators for Dream Big Pty Ltd. a) Prepare a cash budget including Cash Payment and Cash Receipt Budget based on the milestones and performance indicators for the months of July, August and September so that the business can check if it has enough funds to pay off its liabilities. Assume the business is not registered for GST. b) Confirm whether the budget objectives for July, August and September are in line with Dream Big Pty Ltd overall aims and would be consistent with other projects and future forecasts. (1-2 sentences) Solution a) Cash Payments budget May June July Aug Sepi Purchases: 75% 25% Other expenses |1 O