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Question 1 Wamboto Ltd specializes in the importation and sales of equipment for children's indoor play (40 Marks) centers. The company was set up by Mr. Sintentu. Mr Sintentu has asked you to assist him managing his cash balance over the next three months. You have been provided with the following information: 1. The balance on 1 February 2019 is forecast at NS 120 000. 2. Sales for November and December are N$ 130 000 per month. They are expected to rise to N$ 150 000 in January 2009, N$ 170 000 in February 2019 and N$ 190 000 in March 2019. They will then fall to N$ 140 000 for each for each of the following six months. This is due to downturn in demand. 3. All sales are made on credit, 2% of debtors do not pay at all, 70% pay one month after sales and the remaining 28% pay two months after sales. 4. Purchases are made as follows: N$ 60 000 November, N$ 40 000 December, N$ 60 000 January, N$ 50 000 February, N$ 70 000 March, N$ 90 000 April, and N$ 35 000 on May. All purchases are paid for in two months after purchases. 5. The cost of employing Wamboto Ltd's permanent staff is N$ 40 000 per month Wamboto Ltd also employs temporary staff during January, February and March at additional cost equaling to 3% of sales each month. 6. Wamboto Ltd uses a courier to dispatch the equipment to its customers. The cost of this service is 2% of sales value in January to March, falling to 1% per month thereafter 7. The company charges depreciation of N$ 15 000 each month. 8. Wamboto Ltd also owns two indoor play centers that it rents out at the rate of N$ 3 500 each per month from January to April, falling to NS 3 000 per month thereafter. All rent is received one month in advance. 9. Administration costs are forecast at N$ 30 000 each month after deducting depreciation Required: a) Prepare a monthly cash budget for 1 January to 30 March 2019, showing clearly any necessary workings. (40 marks) Unless told otherwise, assume that payments are made in the month in which the costs are incurred

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