Use the information provided below to prepare the following for Warner Limited for August and September 2023 (using separate monetary columns for each month):

3.1 Debtors Collection Schedule (4 marks)

3.2 Cash Budget (16 marks)

INFORMATION

Warner Limited sells computers. The following information is available to assist in the preparation of its cash budget for August and September 2023:

1. An unfavourable bank balance of R22 500 is expected on 31 July 2023.

2. Sixty percent (60%) of all the sales are for cash the balance is on credit. Cash sales for June and July 2023 are forecasted at R72 000 and R144 000 respectively. Sales are expected to increase by 10% per month from August 2023. Sixty percent (60%) of the credit sales is collected in the month after the sale. The remainder is collected two months after the sale.

3. Warner Limited sells its computers at cost plus 50%. All the computers that are sold each month are replaced in the same month. All purchases are on credit and creditors are paid two months after the purchase.

4. Salaries and wages amount to R44 000 for August, 10% more than the amount for July.

5. Rent expense amounts to R48 000 per annum, payable monthly. Insurance is estimated at R36 000 for the year and is payable in September. Rates are estimated at R54 000 per year, paid half-yearly in August and February in equal instalments. Monthly administration costs of R18 000 (excluding R3 000 for depreciation) are payable in the month in which they are incurred.

6. Advertising expenses are expected to be 6% of the monthly sales and are paid one month in arrears.

7. Machinery with a cost price of R200 000 is expected to be purchased during August 2023. A deposit of R40 000 will be paid in August and the balance is payable in five equal instalments commencing September 2023.

8. A long-term loan of R100 000 at 15% per annum interest is to be raised on 01 September 2023. Interest is payable monthly with the first interest payment to be made on 30 September 2023.