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 toShine Wholesalers for the year 2020:  Budgeted sales: July R105000 August R132 000 September R165 000  In October 2020, sales areexpected to increase by 20% relative to sales in September 2020. Cash sales amount to 20% of total sales.  55% of all credit salesare collected in the month of sale, with a discount of 10% to thosedebtors who pay during this time. The outstanding credit sales arecollected in equal instalments over the next two months. There areno bad debts.  Purchases of raw materials are expected to besufficient to meet 60% of the total sales for the next month. Thecompany normally settles half of its creditors in the monthfollowing the month of purchase. The remaining creditors are paidtwo months after the month of purchase.  Wages and salaries arepaid to employees at the end of the month in which they are earned.Wages and salaries are expected to be: June R22 200 July R20 500August R23 500 September R26 500 October R28 000  Rent amounts toR48 000 per annum. This amount is spread evenly throughout theyear.  All other overheads amount to R38 160 per annum, includingannual depreciation amounting to R22 500. Other overheads anddepreciation are incurred evenly throughout the year.  Anindustrial printer which was recently purchased for R45 000 will bepaid off in three equal instalments, commencing in August 2020. The company expects to receive tax refunds of 28 700 from SARS inSeptember 2020.  The company had taken a loan of R10 000 inJanuary 2020. The loan will be repaid in four equal instalments.The last instalment will be repaid in September 2020.  Thecompany’s bank balance at the end of August 2020 was R35 000. Themanagement director of the company wants to revamp the company’s ITsystem in November 2020. This undertaking is expected to cost thecompany R400 000. She wants to know if the company will havesufficient cash to execute the project. Overdraft facilities areavailable. Required: Prepare a cash budget for Shine Wholesalersfor the months of September and October 2020. Note: show ALLcalculations.