QUESTION 2 (20)

REQUIRED Use the information given below to prepare the following for February and March 2021:

2.1 Debtors Collection Schedule (4)

2.2 Cash Budget. (16) Note: * Where applicable, round off amounts to the nearest Rand. * Use separate monetary columns for each month. INFORMATION The following forecasts were made by Matrix Suppliers for the first three months of 2021:

1. The bank balance on 31 January 2021 is expected to be R20 000 (favourable).

2. Budgeted sales for the first quarter of 2021 are as follows: January February March R 350 000 320 000 330 000

3. Cash sales are estimated at 60% of the total sales. The balance of the sales is on credit.

4. Collections from credit sales are expected to be as follows: 40% during the month of sale; 60% in the month after the sale.

5. Budgeted purchases for the first three months of 2021 are as follows: January February March R 220 000 200 000 230 000

6. Seventy percent (70%) of all purchases are for cash and the balance is on credit. Creditors are paid in full in the month following the purchase transaction.

7. Rent expense amounts to R96 000 per year, and is payable monthly. Rent will increase by 10% from 01 March 2021.

8. Selling and administrative expenses are estimated at 10% of sales. They are payable during the month of sale.

9. Insurance amounts to R24 000 per year and is payable monthly. 10. The proprietor intends investing each month 20% of the sales value in excess of R250 000.