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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 R320 000 R370 000 3. Cash sales Credit sales 5. 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 the sale. • 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: January R410 000 6. 7. February R370 000 R390 000 Total purchases March R310000 R320 000 February R460 000 April R250 000 R300 000 March R400 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. 8. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. April R380 000 9. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.

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 R320 000 R370 000 3. Cash sales Credit sales 5. 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 the sale. • 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: January R410 000 6. 7. February R370 000 R390 000 Total purchases March R310000 R320 000 February R460 000 April R250 000 R300 000 March R400 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. 8. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. April R380 000 9. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.

FINANCIAL ACCOUNTING
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 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 R320 000 R370 000 3. Cash sales Credit sales 5. 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 the sale. 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: January February R410 000 R460 000 6. 7. February R370 000 R390 000 Total purchases March R310000 R320000 April R250 000 R300 000 March R400 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. 8. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. 9. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter. April R380 000
Transcribed Image Text: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 R320 000 R370 000 3. Cash sales Credit sales 5. 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 the sale. 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: January February R410 000 R460 000 6. 7. February R370 000 R390 000 Total purchases March R310000 R320000 April R250 000 R300 000 March R400 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. 8. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. 9. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter. April R380 000
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