vii. The total asset turnover ratio was $1\mathrm{.}20.$

viii. The debt ratio was $60\%.$

QUESTION THREE

The following figures are available for Intec $($Pty$)$ Ltd:

$40\%$ of all sales are for cash.

$35\%$ of all purchases are for cash.

Collection from debtors are as follows:

$20\%$ is collected in the month of the sale and $2\%$ discount is granted on these

collections.

$60\%$ is collected in the month following the month of sale.

$15\%$ is collected in the second month following the month of sale.

The remaining $5\%$ is written off as a bad debt.

Intec $($Pty$)$ Ltd will make an investment of R$50000$ in fixed deposit on $01$ April $2017.$

Interest of R$500$ per month on the fixed deposit is expected to be received from

$30$ April $2017.$

Creditors are paid $2$ months after date of invoice.

Rent expense amounts to R$8000$ per month and is payable on the first day of each

month.

Wages will be increased by $10\%$ in April and will increase by a further $5\%$ in May

A new machine is expected to be purchased for R$10000$ cash in May $2017.$

Commission is paid to sales personnel in the month following the month in which it

was earned.

On $31$ March $2017,$ Intec $($Pty$)$ Ltd had a bank overdraft of R$28000.$

Required:

$3\mathrm{.}1.$ Prepare the debtors' collection schedule for April and May $2017.$

$3\mathrm{.}2.$ Prepare the cash budget for April and May $2017.$