Q.2.1 Compile a Debtors collection schedule for the month of October 2019. Round off (6) to two decimals.

Q.2.2 Compile a Creditors payments schedule for the month of October 2019. Round off (4) to two decimals.

Q.2.3 Prepare the cash budget for October 2019. Round to two decimals.

(12)

(12)

Q.2.4

The actual bank balance on 31 October 2019 was R300 000. (8)

Calculate the budget variance

Explain what this variance indicates

Discuss three possible reasons for the variance.

Question 2 (Marks: 30) You are provided with the following actual and forecasted sales of Brush Ltd. Actual August 2019 Forecasted September 2019 Forecasted October 2019 R876 660 R980 000 R1 072 000 Additional information: Cash sales amount to 10% of all sales. . The mark-up is 120% on cost. . Only 10% of all purchases are paid for in cash. Creditors are settled in full after 30 days (the month after purchasing inventory) less 2.5% discount granted. Debtors are given 30 days to settle their debts, however past trends have revealed the following collection periods with respect to debtors: 55% pay in 30 days, in the month following the month of sale less 5% discount allowed. O 40% pay in 60 days. 5% is written off. . It is expected that there will be a favourable bank balance of R20 000 on 1 October 2019. The following additional expenditure will be incurred in October 2019: o Salaries and wages R50 200. o Sundries expenses R10 000. o A deposit on new equipment of R80 000 will be paid