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a) . . . . Lin Wong owns The Delivery Shop, a small transport business that delivers packages. Lin is looking at ways to
a) . . . . Lin Wong owns The Delivery Shop, a small transport business that delivers packages. Lin is looking at ways to grow her business, so she has provided the following information to help with the preparation of a cash budget for November and December 2020. In 2020 the business made 200 deliveries in November and 300 in December. For each delivery the business charges $150. Lin is planning to buy two new larger delivery vehicles at the beginning of November. This will allow the business to increase the number of deliveries made each month by 25% All deliveries are made on credit, with 60% paid in the month of delivery and 40% paid in the month after delivery. The new delivery vehicles will cost Lin $30 000 each, and must be paid for in cash in November. Other expenses incurred by the business are: Maintenance of $40 per delivery Depreciation on each vehicle is $1 500 per month Rent of $48 000 per year is paid monthly Drivers' wages is $2 750 per month Insurance of $10 per delivery Cash at bank as at 31 October is $27 000 Calculate the expected number of deliveries and the expected revenue for November 2020 and December 2020. Expected number of deliveries Expected Revenue November (2 marks) December b) Prepare the collection from debtors schedule and the cash budget for November 2020 and December 2020. (7 marks) October deliveries (actual-180) Expected November deliveries November 10 800 December Expected December deliveries TOTAL
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