INFORMATION:

QUESTION:

You are provided with a Cash Budget of Mbatha Ltd for January to June 2021. The financial year- end is 28 February 2021. Show all calculations. You are required to complete the questions in the answer booklet provided: Additional Information: 1. Total sales for the Budget period is expected to be as follows: January February March April May June 324 000 346 000 360 000 480 000 330 000 ? 2. Cash sales are expected to be 40% of total sales for the entire budget period. 3. . Debtors are expected to pay as follows: 50% pay in the same month as the sales transaction (less 5% discount) 30% pay in the month after the sales transaction month 15% pay in the second month after the sales transaction month 5% are expected to be bad and are written off in the third month after the transaction. . 4. The current mark-up is 60% on cost. 5. A fixed base stock of raw materials is kept at all times. All raw materials are bought on credit. Creditors are paid in the month following the purchase of stock (i.e. within 30 days) to earn a 10% discount. 6. At the end of the financial year ended 28 February 2021, the return on total capital employed was 5% Mbatha LTD Cash Budget for the six period January to June 2021 May June Receipts Feb March April Jan 132 000 148 800 192 000 Cash sales 129 600 138 400 144 000 ? 2 7. 7 Collection from debtors 188 700 194 370 0 0 0 Issue of shares 1 300 000 0 o o 0 0 80 000 Sale of Factory Equip 0 0 ? ? Total Receipts 1 618 300 332 770 ? ? PAYMENTS Payments to creditors 201 563 182 250 185 625 A B Salary of Factory Manager 20 000 20 000 20 000 20 000 20 800 20 800 Wages for 20 Direct Labourers 150 000 150 000 150 000 150 000 161 250 161 250 Directors Fees 66 000 66 000 66 000 66 000 66 000 66 000 Interest on loan (8% p.a.) 5 600 5 600 4 200 4 200 4 200 2 700 Repayment of loan 0 0 D 0 0 E Repurchase of Shares 0 0 0 ? o o Interim dividends paid 0 0 0 0 0 Maintenance of Factory Equip 12 000 12 000 12 000 12 000 2 000 2 000 Electricity (80% for factory) 8 000 8 000 8 000 8 000 6 500 6 500 Deposit on new Factory Equip 0 0 0 0 150 000 0 Instalments on new factory Equip (incl finance charges) 0 0 0 0 0 16 000 Independent auditors fees 0 0 0 60 000 0 0 Total Payments ? ? ? ? ? ? Cash Surplus / Deficit ? ? ? 2 ? ? Cash Balance at the beginning of the period ? 2 ? ? ? ? Cash Balance at the end of the period ? 2 ? ? ? 2 2 Debtors Collection Schedule for January to June 2021 Complete the missing amounts (*) Credit Sales Jan Feb March April May June October 175 000 November 180 000 27 000 December 215 000 64 500 32 250 January 194 400 92 340 58 320 29 160 February 207 600 98 610 62 280 31 140 March 216 000 102600 64800 * April 86400 43200 May 198000 * 59400 June 223200 183840 189180 194040 * *