Let's break down the requirements and solve step by step for **Skybolt Ltd** (2024 financial year). --- ## 1. **Organise the Data** #### Sales, Purchases, Salaries, and Other Expenses | Month | Cash Sales | Credit Sales | Purchases | Salaries & Wages | Other Expenses | |---------|------------|-------------|-----------|------------------|---------------| | March | 120,000 | 280,000 | 200,000 | 53,000 | 15,000 | | April | 127,000 | 297,000 | 212,000 | 57,000 | 17,500 | | May | 110,000 | 150,000 | 130,000 | 60,000 | 18,500 | | June | 135,000 | 178,000 | 156,500 | 58,000 | 18,000 | | July | 140,000 | 182,000 | 161,000 | 55,000 | 19,000 | | August | 115,000 | 139,000 | 127,000 | 58,000 | 21,500 | --- ## 2. **Calculate Cash Inflows** ### A. **Cash Sales (net of 5% discount)** \[ \text{Net Cash Sales} = \text{Cash Sales} \times 95\% \] - June: \( 135,000 \times 0.95 = \textbf{R128,250} \) - July: \( 140,000 \times 0.95 = \textbf{R133,000} \) - August: \( 115,000 \times 0.95 = \textbf{R109,250} \) ### B. **Collections from Credit Sales** #### Collection Pattern: - 40% next month (with 10% discount) - 40% after two months (no discount) - 10% after three months (no discount) - 10% uncollectible #### **Calculate monthly collections (June to August)** #### **June** - From May credit sales: 40% × 150,000 = 60,000 (**within 30 days, less 10% discount**) - 60,000 × 90% = 54,000 - From April credit sales: 40% × 297,000 = 118,800 (**within 60 days**) - From March credit sales: 10% × 280,000 = 28,000 (**within 90 days**) **Total June credit sales collection:** - May: 54,000 - April: 118,800 - March: 28,000 - **Total = R200,800** #### **July** - From June credit sales: 40% × 178,000 = 71,200 (**within 30 days, less 10%**) - 71,200 × 90% = 64,080 - From May: 40% × 150,000 = 60,000 (**within 60 days**) - From April: 10% × 297,000 = 29,700 (**within 90 days**) **Total July credit sales collection:** - June: 64,080 - May: 60,000 - April: 29,700 - **Total = R153,780** #### **August** - From July credit sales: 40% × 182,000 = 72,800 (**within 30 days, less 10%**) - 72,800 × 90% = 65,520 - From June: 40% × 178,000 = 71,200 (**within 60 days**) - From May: 10% × 150,000 = 15,000 (**within 90 days**) **Total August credit sales collection:** - July: 65,520 - June: 71,200 - May: 15,000 - **Total = R151,720** --- ## 3. **Total Cash Inflows** | Month | Net Cash Sales | Credit Sales Collection | **Total Cash Inflow** | |--------|---------------|------------------------|----------------------| | June | 128,250 | 200,800 | **329,050** | | July | 133,000 | 153,780 | **286,780** | | August | 109,250 | 151,720 | **260,970** | --- ## 4. **Cash Outflows** ### (a) **Purchases (net of 5% discount, paid cash)** \[ \text{Net Purchases} = \text{Purchases} \times 95\% \] - June: 156,500 × 0.95 = 148,675 - July: 161,000 × 0.95 = 152,950 - August: 127,000 × 0.95 = 120,650 ### (b) **Salaries and Wages** - 40% wages (paid current month), 60% salaries (paid next month) - Wages paid in cash current month: Salaries & Wages × 40% - Salaries paid next month: Salaries & Wages (prior month) × 60% #### **June** - Wages (June): 58,000 × 40% = 23,200 - Salaries (from May): 60,000 × 60% = 36,000 - **Total paid in June:** 23,200 + 36,000 = **59,200** #### **July** - Wages (July): 55,000 × 40% = 22,000 - Salaries (from June): 58,000 × 60% = 34,800 - **Total paid in July:** 22,000 + 34,800 = **56,800** #### **August** - Wages (Aug): 58,000 × 40% = 23,200 - Salaries (from July): 55,000 × 60% = 33,000 - **Total paid in Aug:** 23,200 + 33,000 = **56,200** ### (c) **Other Expenses** - R4,000/m depreciation (non-cash) - The rest is split equally: Rent (paid in advance, 1st), Water/Electricity (paid 7th next month) #### For June: - Other expenses: 18,000 - Less depreciation: 4,000 → 14,000 left - Rent: 14,000 / 2 = 7,000 paid June 1 (for June) - Water/Electricity: 7,000 (from May, paid June 7) #### For July: - Other expenses: 19,000 - Less depreciation: 4,000 → 15,000 left - Rent: 7,500 (July 1) - Water/Electricity: 7,000 (from June, paid July 7) #### For August: - Other expenses: 21,500 - Less depreciation: 4,000 → 17,500 left - Rent: 8,750 (Aug 1) - Water/Electricity: 7,500 (from July, paid Aug 7) ### (d) **Dividend** - R200,000, paid August 31 --- ## 5. **Total Cash Outflows** | Month | Purchases | Salaries & Wages | Rent | Water/Electricity | Dividend | **Total Cash Outflow** | |--------|-----------|------------------|------|-------------------|----------|-----------------------| | June | 148,675 | 59,200 | 7,000| 7,000 | -- | 221,875 | | July | 152,950 | 56,800 | 7,500| 7,000 | -- | 224,250 | | August | 120,650 | 56,200 | 8,750| 7,500 | 200,000 | 293,100 | --- ## 6. **Cash Budget (June - August 2024)** **Opening Bank Balance (1 June):** R200,000 | Month | Opening | Inflows | Outflows | Net Movement | Closing | |---------|---------|---------|----------|--------------|---------| | June | 200,000 | 329,050 | 221,875 | +107,175 | 307,175 | | July | 307,175 | 286,780 | 224,250 | +62,530 | 369,705 | | August | 369,705 | 260,970 | 293,100 | -32,130 | 337,575 | --- ## **Summary Table** | Month | Opening | Cash Inflows | Cash Outflows | Closing | |---------|---------|--------------|--------------

Certainly! Here's the completed **Summary Table** for Skybolt Ltd's cash budget from June to August 2024: | Month | Opening Balance | Cash Inflows | Cash Outflows | Net Cash Flow | Closing Balance | |---------|-------------------|--------------|---------------|---------------|-----------------| | June | R200,000 | R329,050 | R221,875 | R107,175 | R307,175 | | July | R307,175 | R286,780 | R224,250 | R62,530 | R369,705 | | August | R369,705 | R260,970 | R293,100 | -R32,130 | R337,575 | **Notes:** - The **Opening Balance** for June is given as R200,000. - The **Cash Inflows** are totals of cash sales and collections from credit sales as calculated. - The **Cash Outflows** include purchases, wages, rent, water/electricity, and dividend payments (for August). - The **Net Cash Flow** is inflows minus outflows. - The **Closing Balance** for each month is calculated as: **Opening Balance + Net Cash Flow**. This cash budget helps in assessing the liquidity position of Skybolt Ltd for the specified months.