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 February March April Cash Sales R320 000 R370 000 R310 000 R 250 000 Credit Sales R370 000 R390 000 R320 000 R300 000 3. 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 sale 20% is collected two months after the sale 4. Purchases of inventory are expected to be as follows: January February March April Total Purchases R410 000 R460 000 R400 000 R380 000 5. Sixty percent (60) of then 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) 6. The proprietor' s monthly drawings comprise R12 000 inventory and R10 000 cash 7. The monthly salaries are expected to amount to R 194 400 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 de[posit 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 February March April Cash Sales R320 000 R370 000 R310 000 R 250 000 Credit Sales R370 000 R390 000 R320 000 R300 000 3. 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 sale 20% is collected two months after the sale 4. Purchases of inventory are expected to be as follows: January February March April Total Purchases R410 000 R460 000 R400 000 R380 000 5. Sixty percent (60) of then 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) 6. The proprietor' s monthly drawings comprise R12 000 inventory and R10 000 cash 7. The monthly salaries are expected to amount to R 194 400 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 de[posit 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.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 66.1C
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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 February March April Cash Sales R320 000 R370 000 R310 000 R
250 000 Credit Sales R370 000 R390 000 R320 000 R300 000 3. 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 sale 20% is collected two months after the sale 4. Purchases of inventory are expected to be as follows:
January February March April Total Purchases R410 000 R460 000 R400 000 R380 000 5. Sixty percent (60) of then
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) 6. The proprietor'
s monthly drawings comprise R12 000 inventory and R10 000 cash 7. The monthly salaries are expected to amount to R
194 400 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 de[posit 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.
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