QUESTION 1 (20 Marks) REQUIRED: Use the information given below to prepare the following schedules for April, May and June 2021 (using separate columns for each month):

1.1 Debtors Collection Schedule (6 marks)

1.2 Cash Budget (14 marks)

INFORMATION: Spilak Manufacturers supplied the following information for 2021:

Budgeted sales figures for the first 6 months of 2021 are as follows: January 760 000 February 840 000 March 800 000 April 820 000 May 860 000 June 880 000

Experience has shown that sales are collected as follows: o 70% of the sales are for cash and these customers receive a 10% cash discount. o The remaining sales are for credit and 60% of these sales are collected one month after the sale. The balance is normally collected two months after the sale.

Purchases of inventory are equal to 60% of sales before any discounts. All purchases are on credit and creditors are paid two months after the purchase.

Salaries and wages are forecast at R80 000 per month from March to May 2021. On 01 June 2021 employees will receive a 10% increase in their remuneration.

Marketing expenses are estimated at 12% of the total sales (before any discounts) and payment is delayed by one month.

Administration expenses are expected to amount to R10 000 per month (including R1 000 for depreciation).

An investment of R50 000 will be made in a fixed deposit account on 31 May 2021. Interest at 6% per year will be received monthly from June 2021.

The bank balance in the ledger of Spilak Manufacturers is expected to be R20 000 (unfavourable) on 31 March 2021.