Question $2$

$(12$ marks$)$

Crow Retailers' Sales Manager presented the actual sales and purchases and other expenses for January and February $2024$ as well as the forecasted cash receipts, disbursements and expenses for March and April $2024$ to the accountant to prepare a cash budget.

$\backslash$table$[[,\backslash$table$[[$January$],[($Rand$)]],\backslash$table$[[$February$],[($Rand$)]],\backslash$table$[[$March$],[($Rand$)]],\backslash$table$[[$April$],[($Rand$)]]],[$Total sales,$160000,200000,260000,320000],[$Total purchases,$110000,130000,170000,210000],[$Rent of property,,$15000,15000,15000],[$Salaries and wages,,$50000,49000,49000],[$Municipal services,,$5000,5000,5000]]$

The company pays cash for $10\%$ of its monthly purchases and the rest is purchased on credit. The terms and conditions of its creditors require that $45\%$ of the outstanding balances be paid in the month after the purchase was made and the remaining $55\%$ two months after the purchase was made.

The cash balance in the company's bank account on the first day of March $2024$ was R$25000.$ The company's cash policy dictates that it maintains a minimum cash balance of R$50000.$

The accountant started with the preparation of the pro$-$forma cash budget but then became ill and will be hospitalised for a while. The Chief Executive Officer requested that you step in and complete the pro$-$forma cash budget using the partially prepared cash budget presented below.

Crow Retailers $-$ Pro$-$forma cash budget for the period March $-$ April $2024$

$\backslash$table$[[,\backslash$table$[[$March$],[($Rand$)]],\backslash$table$[[$April$],[($Rand$)]]],[$Cash sales,$52000,64000],[$Receipts: Lagged $1$ month,$80000,104000],[$Receipts: Lagged $2$ months,$64000,80000],[$Total cash receipts,$196000,248000],[$Cash purchases,$17000,21000],[$Payments: Lagged $1$ month,,$],[$Payments: Lagged $2$ months,,$],[$Rent of property,$15000,15000],[$Salaries and wages,$49000,49000],[$Municipal services,$5000,5000],[$Total cash disbursements,,$],[$Net cash flow,,$],[$Beginning cash,,$],[$Ending cash,,$],[$Minimum cash balance,,$],[$Short$-$term borrowing,,$],[$Excess cash balance,,$]]$

Required:

$2\mathrm{.}1$ Use the information provided and the partially completed cash budget to prepare Crow Retailers' cash budget for March and April $2024.$

$(8)$

$2\mathrm{.}2$ Recommend to Crow Retailers' management possible strategies they should consider implementing to improve the cash flow position of the business. Base your recommendations on the contents of the cash budget.

$(4)$