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QUESTION 4 20 marks Slate Traders Ltd. is a wholesaler and retailer of tiles and decorative stone. They sell to a range of hardware stores, building and landscape supply companies. In addition they sell direct to the public. They have provided the following information on their sales, purchases cash payments and cash collections Sales & Revenue Information Slate Traders Lid - Sales Data May June July August September (Actual) (Actual) (Forecast) Forecast) (Forecast) Sales $108 360 $115 850 $116 500 $115 000 $118 000 It is estimated that 20% of the sales are for cash and Boare on credit . or the credit sales - 50% pay their accounts within the month of sale 30% pay in the month after sale - 20% pay during the second month after sale Purchases and Payments Information Slate Traders Ltd - Purchases Data June (Actual) July August September (Forecast) (Forecast) (Forecast) Purchases $57 000 $58 250 $56 500 $59 400 . Al purchases of inventory are made on credit and 40% are paid for in the month they are purchased and 60% in the following month. Al selling and administrative expenses, including a depreciation charge of $4,000, are incurred at the rate of $12,000 per month. Payment is made in the month in which the expense is incurred New machinery costing $18,000 will be purchased in June and the payment will be made in the following month. Slate Traders has a loan of $360,000. Interest at the rate of 8% per annumis paid quarterly, the next due date for payment is 30 June Opening Bank Balance The balance of the bank account at 20 June is $56420 Slate Traders Ltd Cash Budget July-September TOTAL May June July August September July (Actual (Actual) (Forecast) (Forecast) (Forecast) September CASH RECEIPTS BUDGET Sales Credit Sales Cash sales Collections Ourrent month Collections next month Collections 2nd month Total Cash Receipts CASH PAYMENTS BUDGET Purchases Payments current month Payments following month Selling and Admin Expenses Interest expense New Machinery TOTAL CASH PAYMENTS CASH BUDGET Opening Cash Balance Cash receipts Cash Payments CLOSING CASH BALANCE