Instructions: All answers must be typed in and workings must be shown

QUESTION 2 REQUIRED Use the information given below to prepare the following for Genset Limited for July and August: 2.1 Debtors Collection Schedule 2.2 Cash Budget Note: Provide separate monetary columns for each month. Where applicable, round off amounts to the nearest Rand. INFORMATION The following information relates to Genset Limited: 1. Unit sales are as follows: April 4000 Actual (units) May 4 200 June 4500 July 4 800 Budgeted (units) August 5 200 . 2. The selling price per unit is R90 and is expected to increase by 10% from 1 August. 60% of sales are on credit. 3. Credit sales are collected as follows: 30% in the month of sale - these clients get a 5% discount 40% one month after sale 25% two months after sale 5% is written off as bad debts 4. The production schedule is as follows: Actual (units) May 4 500 April 4200 July June 4 800 Budgeted (units) August 5 200 5000 5. Each unit uses 3 labour hours and the direct labour rate is R10 per hour. Wages are paid on 30th of each month. 6. Direct material purchases (in kilograms) are as follows: April 12 600 Actual May 13 500 June 14 400 July 15 000 Budgeted August 15 600 Material costs were R10 per kg for April, May and June and it is expected that the material costs will increase by 10% from 1 July 7.70% of direct materials are purchased on credit. Credit purchases are paid for in the month following purchase. 8. Variable production costs are 30% of direct material costs and are paid in the month in which they are incurred. 9. Fixed production costs (including depreciation of R10 000) amount to R80 000 per month and are paid in the month in which they are incurred. 10. Fixed selling and admin expenses amount to R60 000 per month. This is expected to increase by 8% from 1 August. These expenses are paid in the month in which they are incurred. 11. Variable selling expenses are R5 per unit sold and will increase to R6 per unit sold from 1 July. 12. Variable selling expenses are paid at the end of the following month. 13. An amount of R40 000 will be invested in a fixed deposit on 1 July. Interest of 12% per annum will be earned on this account which will be paid out on the 30th of each month. 14. The company has a favourable cash balance of R122 500 on 30 June