Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 4 REQUIRED Use the information provided by Empire Traders to prepare the following for March and April 2024: 4.1 Debtors Collection Schedule 4.2

image text in transcribed

QUESTION 4 REQUIRED Use the information provided by Empire Traders to prepare the following for March and April 2024: 4.1 Debtors Collection Schedule 4.2 Cash Budget. INFORMATION The following information was provided by Empire Traders: 1. Empire Traders expects to have a favourable bank balance of R60 000 on 28 February 2024. (20 Marks) (4 marks) (16 marks) 2. Budgeted sales figures for 2024 are as follows: January February March April Cash sales R320 000 R370 000 R310 000 R250 000 Credit sales R370 000 R390 000 R320 000 R300 000 3. Thirty percent (30%) of the cash sales is to informal traders who are entitled to a discount of 10% Collections from debtors are usually as follows: 80% is collected in the month after the sale. 20% is collected two months after the sale. 4. Purchases of inventory are expected to be as follows: Total purchases January R410 000 February R460 000 March April R400 000 R380 000 5. Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) 6. The proprietor's monthly drawings comprise R12 000 inventory and R10 000 cash. 7. 8. 9. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Accounting questions

Question

What are some keys to successful retirement?

Answered: 1 week ago