1. Use the cash budget to prepare a graph of quarterly revenue received, payments made and closing cash position.

1. Use the cash budget to prepare a graph of quarterly revenue received, payments made and closing cash position.

2. Explain the graph by answering:

Which month has the highest payments, what causes this?
What advice would you give about the purchase of capital items?
Approximately what effect would not purchasing the capital items have?
Which month has the highest revenue received?
Describe the position of closing cash throughout the year. The owner realises that there will be significant expenses in this first year of operations. Identify in which quarter the milestone of revenues exceeding expenditures occurs. What effect does this have on cash?
What advice would you give about the paying of a $1000 bonus to the junior staff in June promised in the September quarter based on the staffs performance and the financial performance of the business for the year?
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