The Auditor General has reported that 90 municipalities are struggling to provide essential services such as...

 

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The Auditor General has reported that 90 municipalities are struggling to provide essential services such as water and electricity due to budget constraints. In turn these municipalities owe Electricity Suppliers and water boards billions of Rands. The poor revenue collection by municipalities has impacted negatively on the budget of service providers. Considering the current challenges service providers forecasts sales for the next six months as follows: July: R400 000 Oct: R900 000 August: R2 000 000 Nov: R1 000 000 ● Sept: R4 000 000 Dec: R3 000 000 The current sales strategy is that 40% of the sales are done in cash and the remainder on credit. Credit sales are collected as follows: • No collection during the month of sale 60% is collected one month after the month of sale 10% is collected two months after the month of sale The remainder in the third month following the month of sale Required: Calculate the total credit collections from credit sales for October, November and December. The Auditor General has reported that 90 municipalities are struggling to provide essential services such as water and electricity due to budget constraints. In turn these municipalities owe Electricity Suppliers and water boards billions of Rands. The poor revenue collection by municipalities has impacted negatively on the budget of service providers. Considering the current challenges service providers forecasts sales for the next six months as follows: July: R400 000 Oct: R900 000 August: R2 000 000 Nov: R1 000 000 ● Sept: R4 000 000 Dec: R3 000 000 The current sales strategy is that 40% of the sales are done in cash and the remainder on credit. Credit sales are collected as follows: • No collection during the month of sale 60% is collected one month after the month of sale 10% is collected two months after the month of sale The remainder in the third month following the month of sale Required: Calculate the total credit collections from credit sales for October, November and December.

Answer rating: 100% (QA)

ANS WER October R 360 000 November R 400 000 December R 1 800 000 WORK ING October 40 x R 900 000 R ... View the full answer