QUESTION $1$

CASH BUDGET

$(20$ MARKS$)$

REQUIRED

Use the information given below to prepare the following for July, August and September $2017($using

separate monetary columns for each month$)$:

$1\mathrm{.}1$ Debtors Collection Schedule

$1\mathrm{.}2$ Cash Budget

INFORMATION

Coral Manufacturers supplied the following budgeted information for $2017$:

The following sales figures were forecast for the $2^{nd}$ and $3^{rd}$ quarters of $2017$ :

Experience has shown that sales take place as follows:

$60\%$ of the sales are for cash.

The remaining sales are on credit and $30\%$ percent of these sales are usually collected in the

month of the sale. Customers who pay in the month of sale are entitled to a $2\%$ discount. The

balance of the credit sales is expected to be collected in the month after the sale.

Purchases are equal to $50\%$ of sales before any discounts. Half the purchases are for cash and the

balance is on credit. Creditors are paid two months after the purchase.

Salaries and wages are R$37000$ per month from June to August $2017.$ On $01$ September $2017$

employees will receive a $15\%$ increase in their remuneration.

Marketing expenses for June are estimated to be R$45600$ and payment is delayed by one month.

Marketing expenses is calculated as a percentage of sales. The percentage for June is expected to

be maintained for July to September $2017.$

Administration expenses are R$9000($including R$1000$ for depreciation$)$ per month.

An investment of R$50000$ will be made in a fixed deposit account on $31$ August $2017.$ Interest at $6\%$

per year will be received monthly from September $2017.$

The bank balance in the ledger of Coral Manufacturers is expected to be R$20000($favourable$)$ on

$30$ June $2017.$