The following information is applicable to Shine Wholesalers for the year 2020: Budgeted sales: July R105 000 August R132 000 September R165 000 In October 2020, sales are expected to increase by 20% relative to sales in September 2020. Cash sales amount to 20% of total sales. 55% of all credit sales are collected in the month of sale, with a discount of 10% to those debtors who pay during this time. The outstanding credit sales are collected in equal instalments over the next two months. There are no bad debts. Purchases of raw materials are expected to be sufficient to meet 60% of the total sales for the next month. The company normally settles half of its creditors in the month following the month of purchase. The remaining creditors are paid two months after the month of purchase. Wages and salaries are paid to employees at the end of the month in which they are earned. Wages and salaries are expected to be: June R22 200 July R20 500 Required: Prepare a cash budget for Shine Wholesalers for the months of September and October 2020
The following information is applicable to Shine Wholesalers for the year 2020:
Budgeted sales:
July R105 000
August R132 000
September R165 000
In October 2020, sales are expected to increase by 20% relative to sales in September 2020.
Cash sales amount to 20% of total sales.
55% of all credit sales are collected in the month of sale, with a discount of 10% to those debtors who pay during this
time. The outstanding credit sales are collected in equal instalments over the next two months. There are no
Purchases of raw materials are expected to be sufficient to meet 60% of the total sales for the next month. The company
normally settles half of its creditors in the month following the month of purchase. The remaining creditors are paid two
months after the month of purchase.
Wages and salaries are paid to employees at the end of the month in which they are earned. Wages and salaries are
expected to be:
June R22 200
July R20 500
Required:
Prepare a cash budget for Shine Wholesalers for the months of September and October 2020
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