QUESTION $1$

BUDGETS

$(20$ MARKS$)$

The following information has been projected by the management of GORGEOUS

TRADING for the forecast period $01$ September $2024$ to $31$ October $2024.$

Information:

$1.,$

Collections of credit sales from debtors:

$50\%$ in the month of sales

$30\%$ one month after the sales

$15\%$ two months after the sales

Balance due is irrecoverable and must be written off as bad debts.

All purchases are on credit and creditors are paid one month after purchase less

$10\%$ discount.

A fixed deposit of R$15000$ is maturing on $20$ September $2024.$ An interest of R$2000$

will also be due on this date.

Salaries amounts to R$30000$ per month. However, an increase of $8\%$ will come into

effect from $01$ October $2024.$

An air$-$conditioned system costing R$25000$ is scheduled to be purchased and

installed for cash in October $2024.$

Variable expenses are expected to be R$18000$ per month and expected to increase

by R$2000$ with effect from $01$ October $2024.$

The owner withdraws R$20000$ cash each month for her personal use.

A loan repayment of R$50000$ is made annually on $01$ September.

The expected Bank balance on $01$ September is an unfavorable bank

balance of R$7850.$