QUESTION $1(20)$

Required:

Use the information given below to prepare the following for Altech Limited for July and August $2021$:

$1\mathrm{.}1$ Debtors Collection Schedule $(4)$

$1\mathrm{.}2$ Cash Budget $(16)$

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 $2021$

R

Sales $200000$

Cost of sales $100000$

Rent income $8000$

Advertising $4000$

Salaries and wages $10000$

Rates and taxes $1200$

Electricity $3000$

Other operating expenses $9000$

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 R$6000.$

$9.$ Other operating expenses are expected to increase by R$500$ every month. These expenses are paid for in the month in which they are incurred.

$10.$ Electricity is expected to increase by $12\%$ from $1$ August $2021$ due to tariff increases

$11.$ The balance in the bank on $30$ June $2021$ is estimated to be R$40000($favourable$).$