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Use the information provided below to prepare the Cash Budget for January, February and March 2020. Provide separate monetary columns for each month. INFORMATION Some of the items in the Projected Statement of Financial Position of Ultrapro Limited as at 31 December 2019 are as follows: Current assets R Debtors/Accounts receivable 300 000 Current liabilities Bank 50 000 Creditors (for material purchases) 180 000 Additional information The following forecasts have been made by Ultrapro Limited for the first three months of 2020: 1. The sales manager anticipates the following sales volumes at a price of R200 per unit: January February March 2 400 units 3 200 units 4 100 units Seventy percent (70%) of the sales are expected to be for cash. Thirty percent (30%) of the cash sales will be subject to a 10% discount. The rest of the sales are on credit and debtors usually pay their accounts in the month after the sale is made. 2. The unit costs of production for materials and labour are as follows: Direct materials Direct labour R65 R55 3. The purchases manager expects to purchase materials to manufacture the following quantities each month: January February March 2 900 units 3 700 units 4 600 units No inventories of materials are held at the end of each month. 4. 80% of the materials are usually purchased for cash in order to take advantage of a 10% cash discount. The balance is purchased on credit. Creditors are paid one month after the purchase. 5. Direct labour costs are incurred in line with production and paid during the month in which they were incurred. 6. Variable overheads are estimated at R30 per unit produced from January to February, and R35 per unit from March onwards. Fixed overheads are forecast at R90 000 per month, excluding R10 000 for depreciation. Overheads are payable in the month in which they are incurred. 7. The directors intend to purchase machinery with a cost price of R150 000 on 28 February 2020 on credit. A deposit of 20% is payable immediately and the balance of the debt plus interest and finance charges of R6 000 will be paid in six equal monthly instalments, commencing March 2020. 8. At the end of each month the company will invest 10% of the total sales value (excluding discounts) of each month in an investment account. 9. Leasing the premises costs R84 000 per annum and is payable monthly.

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