Use the information provided below to prepare the following for November and December 2021: 4.1 Debtors Collection Schedule 4.2 Cash Budget INFORMATION The following budgeted information was provided by Sentinel Enterprises: 1. The expected bank balance on 31 October 2021 is R20 000 (favourable). 2. Credit sales are forecast as follows: October 2021 November 2021 December 2021 R280 000 R240 000 R320 000
Use the information provided below to prepare the following for November and December 2021: 4.1 Debtors Collection Schedule 4.2 Cash Budget INFORMATION The following budgeted information was provided by Sentinel Enterprises: 1. The expected bank balance on 31 October 2021 is R20 000 (favourable). 2. Credit sales are forecast as follows: October 2021 November 2021 December 2021 R280 000 R240 000 R320 000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Use the information provided below to prepare the following for November and December 2021:
4.1
Debtors Collection Schedule
4.2
Cash Budget
INFORMATION
The following budgeted information was provided by Sentinel Enterprises:
1.
The expected bank balance on 31 October 2021 is R20 000 (favourable).
2.
Credit sales are forecast as follows:
October 2021
November 2021
December 2021
R280 000
R240 000
R320 000
Transcribed Image Text:Credit sales are normally collected as follows:
3.
30% in the month in which the transaction takes place and these debtors are entited to a 5% discount,
70% in the following month.
Cash sales usually make up 60% of the total sales. The balance of the sales is on credit.
4.
5.
Purchases of inventory for resale (excluding discounts) are as follows:
October 2021
November 2021
December 2021
Credit purchases
R200 000
R400 000
R260 000
Cash purchases
R150 000
R200 000
R140 000
6.
Creditors are paid in the month after the purchase. Thirty percent (30%) of the cash purchases is from
suppliers who grant a 10% cash discount,
The salaries for December 2021 are expected to amount to R167 200, after a 10% increase takes effect
from 01 December 2021.
7.
8.
Interest at 15% per annum is payable on the loan at the end of each month. The loan balance on 01
November 2021 is expected to be R240 000 and capital repayments of R10 000 per month are also
payable at the end of each month.
Part of the building is sublet to a tenant. The lease agreement for the year ended 30 November 2021
reflected the rental at R96 000 per annum, The rental will increase by 10% on 01 December 2021, Rent is
payable monthly.
9.
10.
Other cash operating expenses are budgeted at R40 000 for October 2021. These expenses are expected
to increase by 5% each month.
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