Please Help - Submission in 4 Hours. Thank You Loads.

Question 4 (20 Marks)

Use the information provided by Empire Traders to prepare the following for March and April 2024:

4.1 Debtors Collection Schedule (4 marks)

4.2 Cash Budget. (16 marks)

INFORMATION The following information was provided by Empire Traders:

1. Empire Traders expects to have a favourable bank balance of R60 000 on 28 February 2024.

2. Budgeted sales figures for 2024 are as follows:

	January	Feb	March	April
Cash Sales	R320 000	370 000	310 000	250 000
Credit Sales	R370 000	390 000	320 000	300 000

3. Thirty percent (30%) of the cash sales is to informal traders who are entitled to a discount of 10%. Collections from debtors are usually as follows:

80% is collected in the month after the sale.

20% is collected two months after the sale.

4. Purchases of inventory are expected to be as follows:

	January	Feb	March	April
Total Purchases	410 000	460 000	400 000	380 000

5. Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.)

6. The proprietors monthly drawings comprise R12 000 inventory and R10 000 cash.

7. The monthly salaries are expected to amount to R194 400 for April 2024 after an increase of 8% takes effect on 01 April 2024.

8. A fixed deposit, R100 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received.

9. Equipment with a cost price R160 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024.

10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.

Answer:

4.1

EMPIRE TRADERS
DEBTORS COLLECTION SCHEDULE
	Credit sales R		March R		April R

(4 marks

4.2

EMPIRE TRADERS
CASH BUDGET FOR MARCH AND APRIL 2024
	March R		April R
	Workings (if any)
Cash receipts
Cash payments
Cash surplus (shortfall)
Opening cash balance
Closing cash balance

(16 marks)

Workings (If any)