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A new client, C Darwin, who runs a small tourist office in town, has submitted his proposed budget figures with you

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A new client, C Darwin, who runs a small tourist office in town, has submitted his proposed budget figures with you. The business will take effect from 1 March this year and Joe is anxious to know whether he will have sufficient cash to keep his afloat for the first six months of trading. The data he has supplied is estimated for this six month period, ending 31 August. Joe is to put $50,000 into the business bank account on 1 March. He is to borrow a further $50,000 from the HSBC bank at 8.5% per annum rate of interest with effect from 1 June. The forecast of his monthly sales commission is estimated to be as follows: March $6,500, June $13,500 April $12,500, July $14,000 May $12,500, August $12,500 All clients are expected to settle their accounts one month after the sales go through. Joe will draw S 1,500 per month for personal use, but this will commence from 1 April Staff salaries are estimated to cost $ 1,850 per month, payable in the month. Light and heat is estimated to cost $140 quarterly, paid by direct debit, the first quarter being due on 1 June. O Premises are to be purchases for $105,000 and paid for by five equal monthly installments, the first 4 with effect from 1 March with a final installment payable in August. A motor vehicle for $12,600, to be paid for over three equal installments commencing in March. Depreciation on the vehicle is at 30% per annum. Computer equipment valued $2,500 is to be purchased in March with a 10% deposit followed by five equal monthly installments. The equipment is to be depreciated at the same rate as the vehicle. An advertising and promotional campaign is expected to cost $1,500 per month for the first 4 months and $ 1,250 for the final 2 months. Motor expenses are expected to be $ 250 per month payable in the month. General overhead expenses are estimated to be $ 400 per month, payable one month in arrears. Rates, water, insurance and other various costs are estimated to be $ 1,400 per month for the first 4 months of business, rising by 20% thereafter. All these costs are payable one month in arrears. Required: (a) Prepare a cash budget to cover the 6 month period commencing from 1st March. (b) Prepare a profit & loss statement for the 6 month period ending 31 August