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CZJ Ltd seeks your assistance to develop cash and other budget information for May, June and July 2007. The budget is to be based on

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CZJ Ltd seeks your assistance to develop cash and other budget information for May, June and July 2007. The budget is to be based on the following assumptions: Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if payment is made within ten days after the billing date. All Accounts Receivable are booked at gross. 60% of the billings are collected within the discount pen'od, 25% are collected by the end of the month, 9% are collected by the end of the second month and 6% prove to be unocllectible. 54% of all purchases of merchandise as well as selling, general and administrative expenses are paid in the month purchased and the remainder in the following month. Each month's units of ending inventory is equal to 130% oi the next month's units of sales. The cost of each unit of merchandise inventory is R20. Total sellingr general and administrative expenses are equal to 15% of the cunent month's sales and include R2 000 of depreciation. Actual and projected sales are as follows: 2007 R March 354 000 April 363 000 May 357 000 June 342 000 July 360 000 August 366 000 Required: 1-1 Determine the total budgeted cash collections dun'ng May- (8) 1-2 Determine the budgeted number of units of inventory to be purchased during July. (6)

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