Comment on the cash budget and provide recommendations, where applicable. CASH BUDGET FOR THE PERIOD 01 JANUARY TO 31 MARCH 2024 JANUARY (R) FEBRUARY (R) MARCH (R) RECEIPTS 1 284 600 1 603 800 645 000 Cash sales A 250 800 228 000 Collection from debtors 540 000 432 000 396 000 Rent income 21 000 21 000 21 000 Loan from XYZ Bank ? 0 0 Ordinary share capital 0 900 000 0 PAYMENTS 912 600 864 000 828 000 Purchase of stock for cash B 316 800 288 000 Payment to creditors 288 000 C 211 200 Repayment of loan 0 33 000 33 000 Interest on loan 0 4 500 4 200 Bank charges 7 500 ? 6 900 Salaries and wages 240 000 240 000 252 000 Telephone 3 900 3 900 3 900 Advertising 9 000 9 000 9 000 Sundry expenses ? 19 200 19 800 Cash surplus (deficit) 372 000 739 800 (183 000) Cash at the beginning of the month 60 000 432 000 1 171 800 Cash at the end of the month 432 000 1 171 800 988 800

Additional information Cash sales make up 40% of the total sales and a 5% discount is granted on these sales. The balance of the sales is on credit. All credit customers are expected to pay in the month after the sale. The company always uses a mark-up of 25% on cost. Inventory is replaced monthly. Sixty percent (60%) of the purchases is for cash; the rest is on credit. Creditors are paid in the month after the purchase.