The budgeted information below relates to JJ Sanitisers $($Pty$)$ Ltd$,$ a merchandiser that

buys and resells hand sanitisers. The CEO is Joshua Monama. Sam Malatji is the

bookkeeper.

$1.$ Sales, cost of sales, and debtors' collection in terms of the hand sanitisers:

June $2024$

July $2024$

R

R

August $2024$

Total sales

R

$550000$

$600000$

Cost of sales

$580000$

$450000$

$435000$

Opening inventory

$420000$

$45000$

$?$

Closing inventory

$?$

$38000$

$40000$

$$ Cash sales comprise $50\%$ of total sales.

$43000$

$$ Debtors settle their accounts in the month following the month of sales.

$2.$ Purchases of inventory and payment to creditors:

$$ Cash purchases comprise $25\%$ of total purchases.

$$ Creditors are paid according to the following trend:

o $80\%$ are paid in the month of purchases to receive a $5\%$ discount.

o $20\%$ are paid in the month after purchases.

$3.$ Rental income:

$$ Excess storage space is rented out at a fixed rate of R$100$ per square metre $($m$2).$

Rent is received in the month that it relates to$.$

$$ An existing tenant occupies $60$ m$2.$ His lease expires on $30$ June $2024.$

$$ A new tenant has signed a lease agreement for the period $1$ July $2024$ to

$30$ June $2025.$ She will occupy a $75$ m$2$ storage area.

$4.$ Salaries of admin and sales staff:

$$ A new employee will be appointed from $1$ July $2024.$ He will earn R$14800$ per

month.

$$ All the other admin and sales employees will receive an annual increase of $5\%,$

effective from $1$ July $2024.$

$$ These salaries are paid in the month that they relate to$.$

$5.$ Delivery expenses:

$$ Deliveries are outsourced to Alpha Deliveries. Delivery expenses are budgeted at a

fixed percentage of the monthly sales and are paid in the month that they relate to$.$

$6.$ The company is expected to have an opening bank balance of R$53756$

$($favourable$)$ on $1$ July $2024.$

$7.$ Total depreciation amounts to R$10000$ per month.

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$8.$ The company plans to buy a new car and pay a deposit of R$15000$ in this regard in

July $2024.$

$9.$ Additional information:

June $2024$

Salaries of admin and sales staff R$100300$

Delivery expenses R$5500$

Warehouse overheads $($inclusive of the total depreciation referred to

above$)$

R$74000$

Where applicable, warehouse overheads are paid in the month that they relate to$.$

REQUIRED Marks

$($a$)$ Prepare the Cash Budget for JJ Sanitisers $($Pty$)$ Ltd for the month of

July $2024.$

$(21)$

$($b$)$ List three advantages and two disadvantages of increment