Question 1.

Power Vibe is an entertainment company operating for the past 5 years. The new year has just
started and Mr. Marks (CEO) would like to know know what his cash balances will be at the
end of the next three months.

The following information was provided by the accountant:

January February March

Receipt from debtors 100,000 120,000 200,000
Cash receipts 150,000 300,000 200,000
Payment to suppliers 60,000 50,000 70,000
Employment costs 70,000 70,000 70,000
Utilities 15,000 18,000 30,000
Meals and refreshments 5,000 7,000 9,000
Maintenance of building 100,000 10,000 -
Other expenses 90,000 65,000 70,000

Notes
1. Power Vibe will receive a loan of $40,000 in January and repay it in March.
2. Power Vibe made 150,000 sales on credit in March.
3. Power Vibe cash balance at the beginning of January was $80,000

Requirement
Prepare the cash flow projections for the three months from January to March.
Question 2.
Martinique is a retail company operating for the past 10 years. Sales has been reducing and
Mr. Quito (CEO) is concerned about his cash flow. He wants you to project his cash flows for the next
three month to help him plan better.

The following information was provided by the accountant:

June July August

Receipt from debtors 70,000 85,000 60,000
Cash receipts 150,000 140,000 175,000
Payment to suppliers 90,000 95,000 105,000
Employment costs 80,000 80,000 80,000
Utilities 30,000 35,000 42,000
Meals and refreshments 15,000 20,000 25,000
Maintenance of building 45,000 20,000 35,000
Other expenses 115,000 100,000 125,000

Notes
1. Martinique has to repayment a loan of $70,000 in July.
2. Martinique made $250,000 purchases on credit in August.
3. Martinique cash balance at the beginning of January was $10,000.
4. Martinique will withdraw $50,000 in August.

Requirement
Prepare the cash flow projections for the three months from June to August.