Use the information provided below to prepare the following for November and December 2021:(20 Marks)

4.1Debtors Collection Schedule(4 marks)

4.2Cash Budget(16 marks)

INFORMATION

The following budgeted information was provided by Sentinel Enterprises:

1. The expected bank balance on 31 October 2021 is R20 000 (favourable).

2. Credit sales are forecast as follows:

October 2021

R280 000

November 2021

R240 000

December 2021

R320 000

3. Credit sales are normally collected as follows:

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

70% in the following month.

4. Cash sales usually make up 60% of the total sales.The balance of the sales is on credit.

5. Purchases of inventory for resale (excluding discounts) are as follows:

Credit purchases

October 2021 R200 000

November 2021 R400 000

December 2021 R260 000

Cash purchases

October 2021 R150 000

November 2021 R200 000

December 2021 R140 000

6. Creditors are paid in the month after the purchase.Thirty percent (30%) of the cash purchases is from suppliers who grant a 10% cash discount.

7. The salaries for December 2021 are expected to amount to R167 200, after a 10% increase takes effect from 01 December 2021.

8. Interest at 15% per annum is payable on the loan at the end of each month.The loan balance on 01 November 2021 is expected to be R240 000 and capital repayments of R10 000 per month are also payable at the end of each month.

9. Part of the building is sublet to a tenant.The lease agreement for the year ended 30 November 2021 reflected the rental at R96 000 per annum.The rental will increase by 10% on 01 December 2021.Rent is payable monthly.

10. Other cash operating expenses are budgeted at R40 000 for October 2021.These expenses are expected to increase by 5% each month.