The newly established Solar Panel Division $($SPanelD$)$ needs to draft a cash budget for July $2024.$ You

gathered the following information:

$1\mathrm{.}1$ The cash on hand and in the bank is expected to be an overdraft of R$190000$ on $1$ July $2024.$

$1\mathrm{.}2$ The actual information for May and June and the budgeted July $2024$ information extracted

from the statement of profit and loss are as follows:

Details May $2024$

R

June $2024$

R

July $2024$

R

Sales $16000001728000116801000$

Trade creditors $($direct raw materials$)480000518000504000$

Conversion cost $320000346000336000$

Other expenses $560000605000580000$

Fixed manufacturing overheads $($FMO$)340000345000350000$

$1\mathrm{.}380\%$ of sales are for cash and $20\%$ of sales are credit sales. Credit sales are collected over a

two$-$month period of which $70\%$ are collected in the month following the sale, $25\%$ are collected

in the second month following the sale and $5\%$ are written off as bad debt.

$1\mathrm{.}4$ All purchases of direct materials are made on credit and the creditors are paid in full the month

following the month in which purchases are made.

$1\mathrm{.}5$ Variable manufacturing overheads and direct labour are paid in the month it is incurred.

$1\mathrm{.}6$ Other expenses include the administrative building$$s rent of R$501000$ per month which is paid

in advance at the end of the previous month. As per the rental agreement, the rent will increase

by $5\%$ from $1$ August $2024.$ The remaining expenses are paid in the month it is incurred. Use the word $$green$$ in the answ er$.$

$1\mathrm{.}7$ Fixed manufacturing overheads include manufacturing machine depreciation of R$140000$ for

May, R$135000$ for June and R$130000$ for July $2024.$ The FMO will be paid in the month

following the month in which it is incurred.

$1\mathrm{.}8$ SolarPD received a quarter of an insurance payout for a machine damaged because of a power

surge in June $2024.$ The remainder of the amount will be received in July $2024.$ The machine's

book value was R$80000$ and the accounting loss made was R$15000.$

REQUIRED: PART C

$($C $-$ a$)$ Prepare SPanelD cash budget for July $2024$ only. $(12)$

$($C $-$ b$)$ Briefly discuss two measures SPanelD can take to improve its cash flow.