REQUIRED

Use the following information provided by Lindt Limited to:

1.1 Prepare Debtors Collection Schedule for March and April 2020. (6)

1.2 Prepare the Cash Budget for March and April 2020. (14)

Note: Where applicable, round off all amounts to the nearest Rand.

INFORMATION

1. Lindt Limited expects to have a favourable bank balance of R95 000 on 28 February 2020.

2. Total sales figures for 2019 and 2020 are as follows:

December 2019January FebruaryMarchApril

Actual (R) Dec-FebBudgeted (R) Mar-Apr

Total sales390 000280 000295 000280 000290 000

50% of sales are cash sales.

3. Debtors settle their accounts as follows:

60% one month after the sale - a discount of 5% is given to these debtors

35% two months after the sale

5% is written off as bad debts

4. Purchases of inventory for 2020 are as follows:

January FebruaryMarchApril

Total purchases (R) 185 000195 000170000210 000

5. 50% of the purchases are for cash. The balance is purchased on credit. Creditors are paid one month after the month

of purchase.

6. The proprietor made the following drawing during April:

Trading stock R15 000

cash R20 000

7. Monthly salaries amount to R18 000. Salaries will increase by 6% with effect from 01 March 2020.

8. A fixed deposit of R45 000 will be made on 1 March 2020. Interest at 12% per annum will be received monthly on this

fixed deposit.

9. Equipment costing R100 000 will be purchased on 31 March 2020. A deposit of R20 000 will be paid on this date. The

balance will be paid in four equal monthly instalments commencing 30 April 2020.

10. Other cash operating expenses are expected to amount to R60 000 for February 2020 and are expected to increase

by 10% from 1 March 2020.

11. Property rates and taxes are paid monthly and amount to R2 000 per month. These are expected to increase by 10%

with effect from 1 April 2020.

12. Rentals of 20 000 per month are paid monthly. Rentals are expected to increase 10% per annum with effect from 1

April 2020.