Below is the information pertaining to MBALI PTY(Ltd) a horticultural entity based in Garden

Route municipality. Mrs Rose Blom owns the business.

	Actual sales	Budgeted sales	Cost of sales
October 2020	100 000		75000
November 2020	120 000		90000
December 2020		160 000	120 000
January 2021		200 000	150 000

Additional information:

a. The business has overdraft bank facilities of R50 000.

b. 25 % of the total sales are on credit.

c. Debtors are expected to pay their accounts as follows:

- 65 % in the month following the month of the sale.

- 33 % two months following the month of the sale.

- 2 % is to be written off in the third month following the month of the sale.

d. A fixed level of trading stock on hand is maintained throughout the year through

replacement on a monthly basis.

e. Purchases of stock:

- 65 % of all stock is bought on credit.

- Creditors are paid in full in the month following the month of purchase to qualify

for a 5 % discount.

f. It has been agreed that Mrs Blom, will take unused equipment at book value in

January for her own use, the equipment is worth R2 000.

g. R100 000 was invested in fixed deposits with Bahati Bank on 1 November 2020.

Interest is received on a monthly basis at 15 % per annum; half of these fixed

deposits matures on 31 December 2020. The rest matures in February 2021.

h. Rent of R9 000 is payable by MBALI PTY (Ltd) at the start of each month. This will

be increased by 5 % with effect from 1 January 2021.

i. Total salaries for November 2020 amounts to R20 000. One employee, who earns

R2 000 per month, will leave the business at the end of November 2020. The salaries

of the remaining employees will be increased by 15 % with effect from 1 January

2021.

k. A vehicle with a carrying value of R50 500 will be traded-in at book value on 1

December 2020 for a new vehicle costing R160 000. A deposit of R20 500 will be

paid on 1 December 2020 and the balance of the outstanding amount will be paid in

six equal instalments commencing 1 January 2021.

l. The bookkeeper is paid a monthly fee of R2 000.

m. Other operating expenses were R7 500 for November. These expenses are expected

to increase by R500 each month thereafter.

n. The business has an overdraft of R17 000 at the beginning of December 2010.

Interest is calculated by the bank on the balances at the beginning of each month.

Provide for interest at the following rates (calculations to the nearest R.):

- Unfavourable balance: 2 % per month.

- Favourable balance: 1 % per month.

Required:

3.1 Debtors Collection Schedule for the period 1 December 2020 to

31 January 2021

3.2 Cash Budget for the period 1 December 2020 to 31 January 2021