This assessment requires you to interpret the information below and write a short 200-250 word report to the management of Adelaide Furniture Wholesalers regarding their cash position. An amount of $150,000 was borrowed from their bank for repayment in full on September 30, 2016. A statement of budgeted cash receipts and disbursements is provided below. Figures for March and April are actual and all remaining months are budgeted.

Additional information:
average collections from receivables is targeted at 75% in first month, 20% in second month and the remainder in the third month. Average aging of receivables was: January 2016: 29 days February 2016: 31 days March 2016: 45 days April 2016: 47 days Your report should outline the current cash position of Adelaide Furniture Wholesalers, their ability to repay the loan as scheduled, and identify areas in which action could be taken to improve their cash position.

Adelaide Furniture Wholesalers Statement of Budgeted Cash Receipts and Disbursements For the Months March to September 2016 March* April* May June July August Sept Beginning cash balance ($5,500) $12,550 $11,300 S12,750 (S11,600) (S 6,450) S37,700 Add receipts: Collection of $75,800 $5,400 $64,200 $53,200 S86,800 $95,000 $ 85,400 receivables S67,950 $75,500 S75,200 S 88,550 $123,100 Total cash available S70,300 $65,950 Deduct disbursements: Material purchases S25,000 S19,500 $28,000 S29,500 $36,000 $ 18,000 $ 10,800 Direct manufacturing labour $17,000 S18,400 $15,000 S28,000 $25,000 $ 15,000 $11,000 Variable costs $4,200 S3,500 $6,500 $7,500 S7,800 $7,000 $2,800 Fixed costs S12,000 S12,000 $12,000 S12,000 S13,500 $ 13,500 $ 13,500 $ 150 $ 150 Interest payments $250 $250 $250 $150 $250 Total disbursements $57,750 $77,550 $56,650 $62,750 $81,650 $ 50,850 $38,250 Ending cash balance $12,550 $11,300 $12,750 ($11,600) ($ 6,450) $37,700 $ 84,850