QUESTION 1 (20) Required: Use the information given below to prepare the following for Altech Limited for July and August 2021: 1.1 Debtors Collection Schedule (4) (16) 1.2 Cash Budget Note: Provide separate monetary columns for each month. Where applicable, round off amounts to the nearest Rand. Information: Extract of Statement of Comprehensive Income for the month ended 30 June 2021 Sales 200 000 Cost of sales 100 000 Rent income 8 000 Advertising Salaries and wages 4 000 10 000 Rates and taxes 1 200 Electricity Other operating expenses 3 000 9 000 Additional information: 1. The business uses a fixed mark-up of 100% on cost. 2. Sales are expected to increase by 10% each month. 3. Thirty percent (30%) of the sales are for cash and the balance is on credit. Collections from credit sales are as follows: 40% in the month of the sale, and these customers are entitled to a 2% discount; 55% one month after the sale. The balance is usually written off as bad debts. 4. Closing Inventories are kept at a constant level. 50% of purchases are for cash. Creditors are paid one month after purchase. 5. In terms of the lease agreement, the rental income will increase by 10% per annum with effect from 01 July 2021. Rent is received monthly. 6. Advertising is paid monthly and is estimated to be the same percentage of sales as for June 2021. 7. Salaries and wages will increase by 10% with effect from 01 July 2021. 8. Rates and taxes will be paid in one instalment for the year during July 2021. Rates to be paid will amount to R6 000. QUESTION 4 (20) Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected production and sales of 15 000 units are provided for analysis: Variable manufacturing cost Fixed manufacturing cost R1 185 000 R510 000 Sales commission R5 per unit sold Fixed administration cost R130 000 Sales R210 per unit Study the information provided above and answer the following questions independently: 4.1 Calculate the break-even sales value. (5) 4.2 Calculate the sales volume required to achieve a profit of R 800 000. (5) 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant (10) calculations. (20) 5.1 Study the extracts of the Cash Flow Statement of Conlog Limited for the year ended 31 December 2020 and QUESTION 5 answer the following: 5.1.1 What do you understand by "Cash flow from operating activities R 150 000"? 5.1.2 Name three transactions that improve cash flow but do not increase profit. 5.1.3 There is a combination of a positive net cash flow from operating activities and a negative cash flow from investing activities. Is this good for the company? Explain. (4) (6) (5) INFORMATION: Conlog Limited Extracts of Cash Flow Statement for the year ended 31 December 2020 R Cash flow from operating activities 210 000 Cash flow from investing activities (330 000) Additions to plant and machinery (330 000) Cash flow from financing activities 120 000 Increase in long term borrowings 120 000 5.2 Calculate the incremental profit/loss after tax. (5) INFORMATION: Lubners Traders is considering extending credit to some customers who may be at risk of defaulting in payment. Sales will increase by R200 000 if credit is granted to these customers. From the new accounts receivable generated, 8% is expected to be uncollectable. Additional collection costs will be 3% of sales, and the production and selling costs will be 65% of sales. Taxation is 28%.