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To prepare a cash budget based on the information in the image, we need to lay out the expected cash inflows (from sales) and outflows (from purchases) for each month from January to April. Here's the cash budget structure based on the given dataTo prepare a cash budget based on the information in the image, we need to lay out the expected cash inflows (from sales) and outflows (from purchases) for each month from January to April. Here's the cash budget structure based on the given 

### Cash Budget for January to April:

| Month | Expected Sales (MK) | Expected Purchases (MK) | Net Cash Flow (Sales - Purchases) |
|-------|---------------------|-------------------------|-----------------------------------|
| Jan   | 60,000              | 48,000                  | 12,000                            |
| Feb   | 40,000              | 80,000                  | (40,000)                          |
| Mar   | 45,000              | 81,000                  | (36,000)                          |
| Apr   | 40,000              | 90,000                  | (50,000)                          |

### Explanation:
- **Expected Sales (MK)**: This is the cash inflow from sales for each month.
- **Expected Purchases (MK)**: This is the cash outflow for purchases during each month.
- **Net Cash Flow**: The difference between sales and purchases for each month.

### Observations:
1. In **January**, the company expects a positive cash flow of 12,000 MK, as sales exceed purchases.
2. In **February**, **March**, and **April**, the company expects negative cash flows as purchases exceed sales, leading to cash deficits.

Would you like further details or any other assistance on this? 

Here are five follow-up questions:
1. How would you account for opening cash balances in a cash budget?
2. What strategies can be used to manage cash deficits in certain months?
3. How does a cash budget help in financial planning for a business?
4. Could delayed purchases or accelerated sales impact the cash flow positively?
5. What could be the long-term effects of recurring negative cash flow?

**Tip:** Always review your opening and closing balances when preparing a cash budget to account for any leftover funds or deficits from previous months.

From the information below, prepare a cash budget for the period from January to April using the expected sales and purchases data.

Learn how to prepare a cash budget based on expected sales and purchases from January to April. The detailed step-by-step guide includes calculating net cash flow, understanding cash inflows and outflows, and managing cash deficits.

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