QUESTION 4Prepare the following for June and July 2022 from the information provided below.4.1Debtors Collection Schedule4.2Cash BudgetINFORMATIONThe information provided below was taken from the forecasts of Rustom Wholesalers for the financial year ended 31May 2022.EXTRACT OF THE BUDGETED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MAY2022Sales4 800 000Cost of sales2 400 000Rent income120 000Advertising48 000Salaries756 000Rates and taxes12 000Other operating expenses960 000 Additional information1.All inventories are sold at cost plus 25%.2.Sales are expected to be spread out evenly throughout each financial year. Sales are expected to increaseby 18% for the financial year ending 31 May 2023.3.Fifty percent (50%) of the sales are for cash and the balance is on credit. As from 01 June 2022 thirtypercent (30%) of the cash sales is expected to be made to large retailers who will be granted a 10% cashdiscount. Collections from credit sales are usually as follows:* 40% in the month of sale, and these debtors are entitled to a 5% discount;* 55% in the month after the sale.The balance is usually written off as bad debts.Inventories are kept at a constant level. Sixty percent (60%) of the purchases are for cash and the balanceis on credit. Creditors are paid in the month after the purchase.4.In terms of the lease agreement the rental is received monthly. The rent for the year ending 31 May 2023 isexpected to be 10% more than the previous twelve months.5.6.Advertising is paid for monthly and is estimated to be the same percentage of sales (excluding discounts)as for the financial year ended 31 May 2022.7.Salaries increase by 10% on 01 December of each year.8.Rates and taxes will be paid in one instalment for the year during July 2022. Rates are calculated at 80cents (RO.80) per R100 on the value of the premises. The premises are valued at R3 000 000.9.Other operating expenses are expected to increase by 5% and are spread evenly throughout the year.They are paid for in the month in which they are incurred.10.An unfavourable bank balance of R180 000 is expected on 31 May 2022.

A Cash Budget is basically in simple terms that kind of budget which is an estimate of Cash inflows…

4.1 Debtors Collection Schedule 4.2 Cash Budget INFORMATION The information provided below was taken from the forecasts of Rustom Wholesalers for the financial year ended 31 May 2022. EXTRACT OF THE BUDGETED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MAY 2022 R Sales 4 800 000 Cost of sales 2 400 000 Rent income 120 000 Advertising 48 000 Salaries 756 000 Rates and taxes 12 000 Other operating expenses 960 000

4.1 Debtors Collection Schedule 4.2 Cash Budget INFORMATION The information provided below was taken from the forecasts of Rustom Wholesalers for the financial year ended 31 May 2022. EXTRACT OF THE BUDGETED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MAY 2022 R Sales 4 800 000 Cost of sales 2 400 000 Rent income 120 000 Advertising 48 000 Salaries 756 000 Rates and taxes 12 000 Other operating expenses 960 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QUESTION 3 REQUIRED Use the information provided below to prepare the following for Mustang Enterprises for January and February 2024. 3.1 Debtors Collection Schedule 3.2 Cash Budget. INFORMATION The following information was supplied by Mustang Enterprises: 1. Mustang Enterprises expects to have an unfavourable bank balance of R40 000 on 31 December 2023. 2. The monthly sales were projected as follows: 2023 Units November 44 000 December 53 000 2024 Units January 47 000 February 31 000 3. The selling price is R20 per unit (excluding any discounts). All the goods produced each month are expected to be sold in the same month. Sixty percent (60%) of the sales is expected to be on credit and the balance is for cash. Thirty percent (30%) of the cash sales is subject to a discount of 10%. 4. Credit sales are usually collected as follows: 20% in the month of sale, and these debtors receive a 5% discount. 75% in the month after the sale, and the rest is usually written off as bad debts. 5.…
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QUESTION 4 REQUIRED Use the information provided by empire Traders to prepare the following for March and April 2024: 4.1 Debtors Collection schedule 4.2 Cash Budget INFORMATION The following information was provided by Empire Traders: 1. Empire Traders expects to have a favourable bank balance of R60 000 on 28 february 2024. 2. Budgeted sales figures for 2024 are as follows: January February March April Cash Sales R320 000 R370 000 R310 000 R 250 000 Credit Sales R370 000 R390 000 R320 000 R300 000 3. Thirty percent (30%) of the cash sales is to informal traders who are entitled to a discount of 10%. Collections from debtors are usually as follows: 80% is collected in the month after sale 20% is collected two months after the sale 4. Purchases of inventory are expected to be as follows: January February March April Total Purchases R410 000 R460 000 R400 000 R380 000 5. Sixty percent (60) of then purchases is for cash to take advantage of a discount of 15%. The balance is purchased on…
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Question #2 Cash budgeting is critical to a company’s financial information needs. The following information was extracted from the records of A & B Manufacturing Company Limited. The opening cash balances on January 01, 2021 was expected to be $30,000. The budgeted sales were as follows: Budgeted Sales Month Year $November 2020 80,000December 2020 90,000January 2021 80,000February 2021 75,000March 2021 60,000April 2021 70,000 Analysis of records shows that debtors settle according to the following pattern: 70% within the month of sale 30% the following month Extracts of the purchases budget were as follows:Purchases budget Month Year $December 2020 65,000January 2021 50,000February 2021 75,000March 2021 70,000 …