complete all questions

Question 1 (Marks: 25) Q.1.1 There are many pitfalls when it comes to the management of working capital. One (6) such pitfall is the danger of overtrading. Explain, in detail, to your friend what overtrading is. Q.1.2 Total budgeted purchases for Yellow Limited for the next few months are expected (9) to be as follows: Month Budgeted total purchases July 2019 R160 000 August 2019 R188 000 September 2019 R175 000 Additional information: June 2019 total purchases was R190 000. Creditors are expected to be paid as follows: o 60% in the first month following the month of the purchase (.e. 30 days); 40% in the second month following the month of the purchase (i.e. 60 days). 70% of Yellow Limited's total purchases are on credit. Required: Set up a creditor's schedule for August and September 2019, for Yellow Ltd to be able to budget what they need to pay to creditors during these months. Show all workings. Q.1.3 Yellow Ltd would like to see their budgeted cash flow for August and September (10) They have given you the following additional information: Expenses for August R35 000 and September R40 000; Debtors for August R125 000 and September R150 000; Opening balance at 1 August 2019 R180 000. Purchases as per information in Q.1.2 . Required: Redraw the following table in your answer book to show Yellow Ltd their budgeted cash flow for August and September. August September Opening balance Movement during the month Expenses paid Creditors paid Cash purchases Debtors receipts Closing balance Show all workings