QUESTION 6 (20 MARKS) The following information is applicable to Shine Wholesalers for the year 2020:  Budgeted sales:

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QUESTION 6 (20 MARKS)
The following information is applicable to Shine Wholesalers forthe year 2020:
 Budgeted sales: July R105 000 August R132 000 September R165000
 In October 2020, sales are expected to increase by 20%relative to sales in September 2020.
 Cash sales amount to 20% of total sales.
 55% of all credit sales are collected in the month of sale,with a discount of 10% to those debtors who pay during this time.The outstanding credit sales are collected in equal instalmentsover the next two months. There are no bad debts.
 Purchases of raw materials are expected to be sufficient tomeet 60% of the total sales for the next month. The companynormally settles half of its creditors in the month following themonth of purchase. The remaining creditors are paid two monthsafter the month of purchase.
 Wages and salaries are paid to employees at the end of themonth in which they are earned. Wages and salaries are expected tobe:
June R22 200
July R20 500
August R23 500
September R26 500
October R28 000
 Rent amounts to R48 000 per annum. This amount is spreadevenly throughout the year.
 All other overheads amount to R38 160 per annum, includingannual depreciation amounting to R22 500. Other overheads anddepreciation are incurred evenly throughout the year.
 An industrial printer which was recently purchased for R45 000will be paid off in three equal instalments, commencing in August2020.
 The company expects to receive tax refunds of 28 700 from SARSin September 2020.
 The company had taken a loan of R10 000 in January 2020. Theloan will be repaid in four equal instalments. The last instalmentwill be repaid in September 2020.
 The company’s bank balance at the end of August 2020 was R35000. The management director of the company wants to revamp thecompany’s IT system in November 2020. This undertaking is expectedto cost the company R400 000. She wants to know if the company willhave sufficient cash to execute the project. Overdraft facilitiesare available.
Required: Prepare a cash budget for Shine Wholesalers for themonths of September and October 2020. Note: show ALLcalculations.