The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. Theratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after thepurchase. Cash purchases of inventory are subject to a 10% discount.The salaries for February 2021 are expected to amount to R114 480, after an 8% increase takes effecton 01 February 2021.Interest at 15% per annum on the loan balance is paid at the end of each month. The loan balance on01 January 2021 is expected to be R200 000 and capital repayments of R20 000 are made at the end of6.7.each month.Part of the building is sublet to a tenant. The rent expense for the year ended 31 December 2020 isR131 000. The rental increases by 10% on 01 February each year. Rent is received monthly.Other operating expenses are estimated at R28 000 per month. This amount excludes R2 000 fordepreciation. Sixty percent (60%) of the operating expenses are paid for in the month in which they areincurred. The rest is paid in the following month.8.9.5. REQUIREDUse the following information provided by Ashton Enterprises to prepare the:Debtors Collection Schedule for January and February 2021.5.15.2Cash Budget for January and February 2021.Note: Where applicable, round off amounts to the nearest Rand.INFORMATION1.The bank balance on 31 December 2020 is expected to be R40 000 (favourable).2.Expected credit sales are as follows:December 2020January 2021February 2021R360 000R390 000R420 0003.Credit sales usually make up 60% of the total sales. Cash sales make up the balance.Credit sales are normally collected as follows:20% in the month in which the transaction took place. These debtors are entitled to a 5% discount.4.75% in the following month.The rest is usually written off as bad debts.

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Description: The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. Theratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after thepurchase. Cash purchases of inventory are sub

Cash budget: Cash budget is defined as the estimation made by the management in respect of the cash…

Business

Accounting

REQUIRED Use the following information provided by Ashton Enterprises to prepare the: Debtors Collection Schedule for January and February 2021. 5.1 5.2 Cash Budget for January and February 2021. Note: Where applicable, round off amounts to the nearest Rand.

REQUIRED Use the following information provided by Ashton Enterprises to prepare the: Debtors Collection Schedule for January and February 2021. 5.1 5.2 Cash Budget for January and February 2021. Note: Where applicable, round off amounts to the nearest Rand.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 8P: Financing Deficit Stevens Textile Corporation’s 2018 financial statements are shown here: Balance...

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. The
ratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after the
purchase. Cash purchases of inventory are subject to a 10% discount.
The salaries for February 2021 are expected to amount to R114 480, after an 8% increase takes effect
on 01 February 2021.
Interest at 15% per annum on the loan balance is paid at the end of each month. The loan balance on
01 January 2021 is expected to be R200 000 and capital repayments of R20 000 are made at the end of
6.
7.
each month.
Part of the building is sublet to a tenant. The rent expense for the year ended 31 December 2020 is
R131 000. The rental increases by 10% on 01 February each year. Rent is received monthly.
Other operating expenses are estimated at R28 000 per month. This amount excludes R2 000 for
depreciation. Sixty percent (60%) of the operating expenses are paid for in the month in which they are
incurred. The rest is paid in the following month.
8.
9.
5.

REQUIRED
Use the following information provided by Ashton Enterprises to prepare the:
Debtors Collection Schedule for January and February 2021.
5.1
5.2
Cash Budget for January and February 2021.
Note: Where applicable, round off amounts to the nearest Rand.
INFORMATION
1.
The bank balance on 31 December 2020 is expected to be R40 000 (favourable).
2.
Expected credit sales are as follows:
December 2020
January 2021
February 2021
R360 000
R390 000
R420 000
3.
Credit sales usually make up 60% of the total sales. Cash sales make up the balance.
Credit sales are normally collected as follows:
20% in the month in which the transaction took place. These debtors are entitled to a 5% discount.
4.
75% in the following month.
The rest is usually written off as bad debts.

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