4 "Reach the Heights" has a chain of specialist shops which provide semi bespoke equipment for climbers, This means that in many cases the standard equipment is adjusted or modified to meet the dimensions ot the climber and the type of terrain the climber will operate in. The advisors are professional instructors and safety personnel, The branches are expected to create their own budget. to make a profit and to remain solvent. Each branch also prepares actual performance statements. The Northumberland Branch has the following information for the first three months of 2022 Opening Balances Receivables Bank Current liabilities Trade Payables 80.000 3.000 20.000 Estimates for the functional budgets for 2022: Sales revenue Advice Equipment Expenses Wages Administrative overhead Additional information J anuary February 402.000 90.000 68 ooo 60 ooo 26.000 23,000 13.100 14,900 March 72,000 48 ooo 23.000 16, 100 i) All sales represent 60% advice to the customer 40% equipment. Sales are on credit. typically 50% of customers, pay in the month after sale. 50% two months after sale. Receivables are to be paid at 50% in month 1 and 50% in month 2. ii) Direct material purchases represent 40% of the sales equipment revenue and are purchased as required by the client There is no inventory. iii) Purchases of materials are paid for in the month after purchase. Trade payables at the beginning of the year will be paid in month 1 . iv) Wages and administrative costs are pad in the month in which they are incurred. v) A commission of 5% of sales revenue for advice is paid to employee advisors. This is separate from the wages figures shown above. vi) Administrative overhead estimates shown above include the monthly depreciation of 2.000 per month. vii) Overdraft interest is 1% per month based on the previous monthly balance.