USE THE FOLLOWING INFORMATION TO ANSWER QUESTIONS 4 TO 6. Whittle Ltd is preparing a cash budget for the first six months of the coming year, 2024. The company’s financial manager has pulled all the cash sales and income from the past year (2023) and adjusted them for the expected growth in the coming year already and calculated net cash flows for each month, except for collections from credit sales. The system however does not do credit collection estimates, however an ageing report has been generated. Credit sales over the last four months of 2023 were as follows: September October November December R10 000 R12 000 R15 000 R45 000 Credit sales for the first 6 months of 2024 were estimated as follows: January February March April May June R5 000 R10 000 R12 000 R14 000 R18 000 R25 000 The ageing analysis indicates that on credit sales, payments are usually made as follows for any given month’s sales: 1 month 2 months 3 months 50% 30% 20% The net cash flows for the first six months of 2024 excluding the credit collections were estimated as follows: January February March April May June -R10 000 -R20 000 -R30 000 -R40 000 -R40 000 -R45 000 The cash balance at the start of January is R0. Question 4 What would the receipts from credit sales that took place in December 2023 be, in the month of January 2024? (Ie. The collection on credit sales that took place in December 2023, in January 2024.) a. R7 500 b. R15 000 c. R22 500 d. R45 000 Question 5 What are the total collections from credit sales in March? a. R9 500 b. R12 600 c. R15 500 d. R22 500 Question 6 What would the closing balance for June be, if the opening balance for June is -R53 500? a. R26 500 b. R53 200 c. R61 600 d. R82 900
USE THE FOLLOWING INFORMATION TO ANSWER QUESTIONS 4 TO 6.
Whittle Ltd is preparing a
The company’s
Credit sales over the last four months of 2023 were as follows:
|
September |
October |
November |
December |
|
R10 000 |
R12 000 |
R15 000 |
R45 000 |
Credit sales for the first 6 months of 2024 were estimated as follows:
|
January |
February |
March |
April |
May |
June |
|
R5 000 |
R10 000 |
R12 000 |
R14 000 |
R18 000 |
R25 000 |
The ageing analysis indicates that on credit sales, payments are usually made as follows for any given month’s sales:
|
1 month |
2 months |
3 months |
|
50% |
30% |
20% |
The net cash flows for the first six months of 2024 excluding the credit collections were estimated as follows:
|
January |
February |
March |
April |
May |
June |
|
-R10 000 |
-R20 000 |
-R30 000 |
-R40 000 |
-R40 000 |
-R45 000 |
The cash balance at the start of January is R0.
Question 4
What would the receipts from credit sales that took place in December 2023 be, in the month of January 2024? (Ie. The collection on credit sales that took place in December 2023, in January 2024.)
a. R7 500
What are the total collections from credit sales in March?
a. R9 500
b. R12 600
c. R15 500
d. R22 500
Question 6
What would the closing balance for June be, if the opening balance for June is -R53 500?
a. R26 500
b. R53 200
c. R61 600
d. R82 900
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