QUESTION $3(20$ Marks$)$

REQUIRED

Study the information provided below and prepare the following for July and August $2024.$

$3\mathrm{.}1$ Debtors Collection Schedule $(4$ marks$)$

$3\mathrm{.}2$ Cash Budget $(16$ marks$)$

INFORMATION

Glenville Limited is in the process of developing a cash budget for July and August $2024.$ The following

information is available:

$1.$ Expected sales from May to August $2024$ are as follows:

May R$750000$

June R$850000$

July R$1500000$

August R$1000000$

$2.$ Historically $70\%$ of the company$$s sales has been on cash and the rest on credit. Twenty percent

$(20\%)$ of the cash sales is subject to a discount of $10\%.$

$3.$ Sixty percent $(60\%)$ of the credit sales is usually collected in the month after the sales, thirty five percent

$(35\%)$ is collected two months after the sale and the balance is written off as bad debts.

$4.$ During August $2024$ the company expects to receive a dividend of $8$ cents per share on the $70000$

shares that it holds in Camry Limited.

$5.$ The company$$s purchases of inventory are estimated to be $60\%$ of sales. Thirty percent $(30\%)$ is paid

in cash and a discount of $10\%$ is receivable. The balance is paid in the month after the purchase.

$($Separate entries are required for the cash purchases and payments for credit purchases.$)$

$6.$ The monthly rental, payable at the end of each month, will increase by $10\%$ with effect from $01$ August

$2024.$ The rental payable on $31$ August is R$26400.$

$7.$ The fixed salary cost for $2024$ is R$420000$ and is paid evenly every month.

$8.$ Interest on loan for two months at a rate of $15\%$ per year is payable on the loan balance of R$150000$

during August $2024.$

$9.$ New machinery with a cost price of R$450000$ will be purchased and paid for during July $2024.$

$10.$ Other cash operating expenses are forecast at R$200000$ for June $2024$ and are expected to increase

by $5\%$ each month.

$11.$ Cash in the bank on $30$ June $2024$ is expected to amount to R$20000.$