QUESTION $4$

$(20$ Marks$)$

REQUIRED

Prepare the following for April, May and June $2025$:

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

$(6$ marks$)$

$4\mathrm{.}2$ Cash Budget.

$(14$ marks$)$

Note: The items that comprise General and administrative expenses must be shown separately.

INFORMATION

Bentall Limited is a retail outlet that is formulating its plans for the first half of $2025.$ The following information is available:

The figures below show the expected sales values of the products $($excluding discounts$)$:

$\backslash$table$[[2025,$R$],[$January$,900000],[$February$,945000],[$March$,990000],[$April$,1035000],[$May$,915000],[$June$,1020000]]$

Seventy percent $(70\%)$ of the sales is for cash and the balance is on credit. Customers who purchase for cash are entitled to a discount of $10\%.$ Forty percent $(40\%)$ of the credit sales is usually collected in the month of the sale and these debtors receive a $5\%$ discount. The balance is collected in the month after the sale.

The products are sold at cost plus $50\%$ and a fixed inventory level of $R150000$ is maintained at the end of each month. All purchases are on credit and creditors are paid three months after the purchase.

Labour costs are estimated to equal $10\%$ of the current month's sales $($excluding discounts$).$ These are paid for in the applicable month.

General and administrative expenses are projected to be R$792000$ for $2025.$ Except for property taxes and directors' fees all other expenses are incurred evenly throughout the year. Property taxes are paid in four equal instalments in the last month of each quarter. Directors' fees are expected to increase by $10\%$ with effect from $01$ May $2025.$ General and administrative expenses comprise the following:

$\backslash$table$[[,$R$],[$Directors$\text{'}$ fees,$144000],[$Advertising$,198000],[$Property taxes,$72000],[$Insurance$,108000],[$Electricity and water,$90000],[$Depreciation$,180000],[$Total$,792000]]$

A company tax payment will be made on $01$ April $2025$ based on $50\%$ of the estimated profit of R$300000$ for the financial year. The company's tax rate is $27\%.$

The closing bank balance on $31$ March $2025$ is expected to be R$15000.$