1. Prepare a 12-month cash budget for the client using a spreadsheet based on the base data attached to Appendix C. Discuss the benefits and limitations of the cash budget and budgetary planning and control of the client.

b) Identify problems (e.g., sudden increase/decrease in cash position due to different scenarios, etc) revealed by budgetary planning and control prepared for the client. Provide a solution to such a problem. Then justify the impact of such a solution on the client’s business operations.
 

Appendix C: Cash Budget base financial data Village-Wide Catering Company Start up capital and Cash Budget of Village-Wide Catering Company Owner's Capital Bank Loan Sales Revenue Marketing expenses Rent/property expenses Purchases Wages & salaries Manchinery & Equipments Utility expenses One off One off Per month 20% on credit Per month Per month Per month Per month One off Per month Per month 100,000 50,000 20,000 3,000 11,500 3,500 2,500 85,000 1,000 Loan & interest payment Requirements: Preaper 12-month Cash Budget based on the data provided above. However, you can also consider the following scenario to upgrade your work 2,000 1. Increase the marketing budget by 10% per month, which in turn generate an additional 20% in sales revenue. 2. Offer one month credit on credit sales 3. Reduce rental / property expense by 15% per month 4. No purcahses were made in the 5th month