Practice question

Ganymede Ltd is planning its cash flow for the three months April to June 2018, and the
following budgeted information is available.
The company will have a bank overdraft of $14,360 on 1 April 2018
Sales and purchases will be as follows:
February March April May June
($) ($). ($). ($). ($)
Sal 27100 29400 30300 28600 26200
Pur 15310 16230 17190 15870 14420
35% of the sales income will be received in the month following the sale and 62% will be
received two months after the sale. The remainder will be written off as an irrecoverable
debt.
Purchases will be on one month’s credit.
• Wages and salaries will be $2,720 per month, payable in the month in which they are
incurred.
• Drawings of $1,800 will be taken out by the owner each month.
• Heat, light and power will be $390 per month and will be paid quarterly in February, May,
August and November.
Other costs will be $1,200 per month plus a commission of 5% of sales. These will be
payable in the month in which they are incurred.
Other costs do not include any depreciation.
The company has non-current assets that cost $180,000 in august 2014, and are expected to
have a residual value of $30,000 at the end of their five-year useful life.
Bank charges are 2.5% per month on any overdraft. These are applied to any overdrawn
balance and are charged in the following month.
(a) Prepare the cash budget for each of the three months April to June 2018. The budget
should be in columnar format and all figures should be calculated to the nearest $.
(b) Explain two reasons why it is important for Ganymede Ltd to manage its cash flow
efficiently.
(C) Evaluate Ganymede Ltd’s cash flow position.
Actually it was my exam question but i can’t complete fully that i had a few errors but i couldn’t find it Can you help to solve this question fully i wanna know where i did my errors plz