REQUIRED

Use the information provided below to prepare the following for August and September 2022:

4.1 Debtors Collection Schedule

4.2 Cash Budget

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INFORMATION

The following information was provided by Luton Enterprises to assist in the preparation of its cash budget for

August and September 2022:

An unfavourable bank balance of R60 000 is expected on 31 July 2022.

2

Expected credit sales are as follows:

July 2022

August 2022

September 2022

R720 000

R792 000

R871 200

Credit sales usually make op 75% of the total sales. Cash sales make up the balance.

Credit sales are normally collected from debtors as follows:

30% in the month in which the transaction takes place, and these debtors are entitled to a 5%

discount;

65% in the following month.

The rest is usually written off as bad debts,

incroases by the same percentage as the percentage increase in sales. Fifty percent of the purchases

is for cash and the balance is paid in the month after the purchase.

The monthly salarias for September 2022 are expected to amount to R204 480, after an increase of

6,5% takes effect from 01 Soptember 2022.

Interest at a rate of 18% per annum on the loan balance is payable monthly. The loan balance on 31

July 2022 is expected to be R480 000 and a repayment of R20 000 (excluding interest) is made at the

end of each month,

Part of the building is sublet to a tenant and rent is receivable on the last day of each month. The lease

agreement for the year ended 31 August 2022 reflected the rental as R230 400 per annum, The rental

Will increase to R253 440 for the period 01 September 2022 to 31 August 2023.

Other operating expenses amount to R26 000 per month. This amount excludes R2 000 for

depreciation. Operating expenses are paid for in the month in which they are incurred.