The following information relates to Lusaka Enterprises.

Information

1. The bank balance on 30 October 2017 was R24 000 (favourable).

2. Actual and budgeted sales are as follows:

Actual Budgeted

September 2017 October 2017 November 2017 December 2017

Cash

sales

R130 000 R140 000 R130 000 ?

Credit

sales

R150 000 R180 000 R170 000 R200 000

3. Credit sales are normally collected as follows:

50% one month after sale.

45% two months after the sale.

The rest is usually written off as bad debts.

4. The cash sales for December are expected to be 20% greater than the cash sales for

November.

5. Purchases are expected to be as follows:

Actual Budgeted

October 2017 November 2017 December 2017

Cash

purchases

R96 000 R104 000 R112 000

Credit

purchases

R100 000 R110 000 R120 000

6. Creditors are paid one month after the month of purchase.

7. The monthly salaries amount to R50 000. Salaries are expected to increase by 9%

with effect from 1 December 2017

8. Interest at 18% per annum on the loan balance of R100 000 is paid monthly. A

repayment of R20 000 will be made on 31 December 2017.

9. Part of the building is sublet to a tenant. The lease agreement for the year ended 30

November 2017 reflected the rental amount of R2 000 per month. The rental will

increase by 10% on 1 December 2017.

10. Other cash operating expenses amounted to R10 000 for October 2017. These

expenses are expected to increase by R300 each month.

Required:

1.1 Prepare the debtors collection schedule for November and December 2017. (4)

1.2 Prepare the cash budget for November and December 2017. (16)