Financial statements and additional information for Wilson Commodity Ltd. are available for download from McGraw-Hill's Connect or your course instructor (see the Preface for more information). The company's fiscal year end is September 30. Wilson's management wants to estimate the company's cash balances for the last three months of calendar year 2021, which are the first three months of fiscal year 2022. The questions accompanying the spreadsheet ask you to do a monthly cash budget, pro forma financial statements, and a cash flow forecast for the period.

WILSON COMMODITY LTD.
Facts and assumptions
Sales (20% for cash, the rest on 30-day credit terms):
2021 Actual	2021 Projected
July	August	September	October	November	December
76,000	88,000	266,000	135,000	55,000	58,000
Purchases (all on 60-day terms):
2021 Actual	2021 Projected
July	August	September	October	November	December
116,000	122,000	257,000	65,000	29,000	27,000
Salaries payable monthly			25,000
Principal payment on debt due in December		25,700
Interest due in December			11,000
Dividend payable in December		15,000
Taxes payable in November			21,000
Addition to accumulated depreciation in December	4,000
Cash balance on October 1, 2021		34,000
Minimum desired cash balance		15,000
WILSON COMMODITY LTD.
INCOME STATEMENT (Rand in thousands)
Fiscal year ended September 30, 2021
Net sales			1,581.6
Cost of goods sold1		1,098.0
Gross profits			483.6
Selling and administrative expenses2	240.0
Interest expense		18.0
Depreciation3		16.0
Net profit before tax		209.6
Tax at 30%			62.9
Net profit after tax		140.4
BALANCE SHEET (Rand in thousands)
September 30, 2021
Assets
Cash			34.0
Accounts receivable		212.8
Inventory			425.0
Total current assets		671.8
Gross fixed assets		135.0
Accumulated depreciation		52.0
Net fixed assets		83.0
Total assets			754.8
Liabilities
Bank loan			0.0
Accounts payable		379.0
Accrued expenses4		55.0
Current portion long-term debt5	25.7
Taxes payable			56.0
Total current liabilities		515.7
Long-term debt		120.0
Shareholders' equity		119.1
Total liabilities and equity		754.8
1 Cost of goods sold consists entirely of items purchased during the quarter.
2 Selling and administrative expenses consist entirely of salaries.
3 Depreciation is straight-line at the rate of R4,000 per quarter.
4 Accrued expenses are not expected to change in the last quarter.
5 R25.7 due December 2021. No payments for remainder of year.

Required:

a. Using the information provided, construct a monthly cash budget for October through December 2021. Based on your analysis, will Wilson enjoy a surplus of cash, or require external financing? (7 marks)

b. Construct a pro forma income statement for the first fiscal quarter of 2022 (Oct. through Dec. 2021) and a pro forma balance sheet as of December 31, 2021. What is your estimated external funding required for December 31, 2021? (8 marks)

c. Based on your answers above, construct a cash flow forecast for Wilson for the period October through December 2021. (5 marks)