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Loudfire Safaris have requested you to prepare a cash budget for the period ending 31 March 2013. The following projections have been made for the next 4 months
December
(Rand)
January
February
March (Rand)
Credit
Purchases
10 000
15 000
18 000
25 000
Credit Sales
35 000
40 000
55 000
Additional information:
60% of the sales are collected in the month of the sale and the balance the following month.
30% of the purchases are paid for in the month of purchase, 50% in the following month and the balance in the month after.
Monthly salaries: R12 500
Advertising per month R3 600
The debit balance at the bank at end of December was R 5 000.
Required:
Prepare a cash budget statement to ascertain the cash position at the end of every month for Loudfire Safaris.
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