accountant of the concem and have been given the task of preparing the cash budget for the business for the quarter ending March 31, 2021. Your data collection has yielded the following: Extracts from the sales and purchases budgets are as folows: Sales Month Cash Sales Purchases On November 2020 - March 2021 November December January February March Account $480.000 $151,100 $145.500 $600,000 $159.025 $700.000 $169,350 S650,.000 $176.200 $390.000 $360.000 $505.000 $400.000 $518.000 $800 000 () An analysis of the records shows that trade receivables (accounts receivable) are settied according to the following credit patterm, in accordance with the credit terms 2/30, n90. 45% in the month of sale 30% in the first month following the sale 25% in the second month following the sale () Expected purchases include cash purchases of $25,000 in January and $18.000 in March. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms 430, n60: 75% in the month in which the inventory is purchased 25% in the following month (iv) The management of G& J Merchandising & More is in the process of upgrading its fleet of motor vehicles. During March the company expects to sell an old Toyota Corolla motor vehicle that cost $500.000 at a gain of $45,000. Accumulated depreciation on this motor vehicle at that time is expected to be $340.000. The employee will be allowed to pay a deposit equal to 60% of the selling price in March; the balance will be settled in two equal amounts in April & May of 2021. () An air conditioning unit, which is estimated to cost $300,000, will be purchased in February. The manager has made arrangements with the suppliers to make a cash deposit of 40% upon signing of the agreement in February. The balance will be settled in four (4) equal monthly instalments beginning March 2021. (v) A long-term bond purchased by G & J Merchandising & More 4 years ago, with a face value of $500.000 wil mature on January 20, 2021. In order to meet the financial obligations of the business, management has decided to liquidate the investment upon maturity. On that date quarterty interest computed at rate of 5%% per annum is also expected to be collected. (vii) Fixed operating expenses which accrue evenly throughout the year, are estimated to be $2.016.000 per annum. [including depreciation on non-current assets of $42,000 per month and are e settled d monthly. (vi) Other operating expenses are expected to be $177,000 per quarter and are settied monthly.
1) Use the stated collection policy of an entity to determine the expected monthly collections for trade receivables
2) Given the collection policy of suppliers, compute the expected cash disbursements for accounts payable
3) Given an expected set of transactions for an entity, develop a monthly
4) Use the collection/payment policy to determine the balances to be reflected in the balance sheet as expected trade receivables and payables at a given date.
5) State and explain internal measures that can be implemented to increase cash balance
Please assist with question (b) showing workings as well
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