Question $1$

$(25$ marks$)$

Use the following information which relates to ABC Limited to answer the questions which follow:

Information:

Cash at bank on $1$ January $2022$ amounted to R$100000.$

Projected sales for the first four months of $2022$ :

January $R200000$

February $R400000$

March $R700000$

April $R800000$

Fifty per cent $(50\%)$ of the sales are for cash and fifty per cent $(50\%)$ are on credit. Cash customers are entitled to a $5\%$ cash discount.

$3.$ Collection of credit sales:

$90\%$ of the credit sales are collected in the following month of the sale and the balance is written off as a bad debt.

$4.$ Purchases for the first four months of $2022$ are expected to be as follows:

January R$200000$

February R$100000$

March R$150000$

April R$180000$

All purchases are on credit. $50\%$ of the purchases will be paid for in the month of purchase and the remaining $50\%$ in the following month.

$5.$ Fixed overheads total R$300000$ per year and are paid for equally each month.

$6.$ Administrative expenses are paid for in the month in which they are incurred and are estimated at a total of R$10000$ per month

$7.$ An investment of R$300000$ matures on $28$ February $2022,$ and interest of R$10000$ will also be received on this date.

Required:

Prepare the Cash Budget for the first four months of $2022.$