Answer Happy

QUESTION 120 MARKS A is a trading entity. Purchases are on credit, with 70% paid in the month following the date of purchase and 30% paid in the month after that. Sales are partly on credit and partly for cash. Customers who receivdatdit are given 30 days to pay. On average 60% pay within30 days, 30% pay between 30 and 60 days and 5% pay by between 60 and 90 days. The balance is written off as irrecoverable. Other overheads, including salaries, are paid within the month incurred. AM plan to purchase new equipment at the end of June 2015, the expected cost of which is P250,000. The equipment will be purchases on 30 days credit. payable at the end of July. The cash balance on 1 May 2015 is P96.000. The actual/budgeted figures for the six month to July 2015 were: Budgeted April May July PODO 120 Credit purchases Other overhead expenses 50 Actual March P'000 Credit Sales Cash sales Feb P'000 100 30 45 40 100 P'000 110 35 50 40 June P1000 120 40 55 50 PODO 110 35 55 50 30 SO 40 10 Required: - Prepare a monthly cash budget for the period May to July 2015 (1 mark) As the lid of AMheing able to pay for the equipment when the due (5 bar DOLL