QUESTION $3$

Read the case study$/$ scenario below and answer the questions based on the case study.

QIN $($Pty$)$ Limited $($QPL$)$ is a small$-$medium sized company that specialises in the manufacturing of roof tiles that are used in the building industry. QPL is preparing its budget for the $2025$ financial year. Below are the results for the year ended $31$ December $2024$:

Line Item

$2024$

R

Accounts Receivable

$150000$

Accounts Payable

$(35000)$

Bank

$45000$

$$ Credit sales for the year are expected to be R$3500000($earned evenly$)$ and debtors repay their debts as follows:

$5\%$ immediately

$5\%$ two months after the sale

$25\%$ six months after the sale

$50\%$ eight months after the sale

$10\%$ nine months after the sale.

The balance of R$150000$ will be received within the first month of $2025$s financial year.

$$ All purchases are on credit, and the gross profit percentage for $2025$ is expected to remain at $55\%.$ Payments are made in the month following the purchase. The R$35000$ relates to the previous months purchases.

$$ The target cash balance is R$10000$ per month for the $2025$ financial year.

Required

Prepare the cash budget for the $2025$ financial year. Your answer should include a month$-$by$-$month analysis of the cash flows.