QUESTION $2$

REQUIRED

$(20$ Marks$)$

Prepare the Cash budget of a project of Midas Enterprises for the period $01$ February $2024$ to $30$ April $2024$ from the information provided below. $($Note: The Cash budget must reflect separate monetary columns for each month.$)$

INFORMATION

A favourable bank balance of $R7000$ is expected on $31$ January $2024.$

Expected monthly total sales are as follows:

$\backslash$table$[[,$Units$],[$January$,5000],[$February$,5000],[$March$,4500],[$April$,5700]]$

The selling price is $R120$ per unit. All units produced are sold in the same month.

$3.$ Cash sales comprise $60\%$ of the total sales and a $5\%$ cash discount is granted on all cash sales. The balance of the sales is on credit. Debtors pay in the month after the sale. $($Separate entries are required for cash sales and receipts from debtors.$).$

$4.$ Material purchases are expected to be as follows:

$\backslash$table$[[$January$,$R$260000],[$February$,$R$240000],[$March$,$R$216000],[$April$,$R$300000]]$

Seventy percent $(70\%)$ of the material purchases is for cash and balance is paid for in the following month. Forty percent $(40\%)$ of the cash purchases is subject to a $10\%$ cash discount. $($Separate entries are required for cash purchases and payments to creditors.$)$

$5.$ Labour costs amount to $R38$ per unit and are paid in the month in which it is incurred.

$6.$ Manufacturing overheads are forecast at R$36000$ per month but exclude R$3600$ per month for depreciation on machinery. Manufacturing overheads are payable in the month they are incurred.

$7.$ Selling and administrative costs contain a fixed portion of R$42000$ per month and a variable component of $20\%$ of the sales value $($before any discounts are allowed$).$ These costs are paid by the end of the applicable month. $($One entry only is required for selling and administrative costs.$)$

$8.$ Equipment with a cost price of R$240000$ is to be purchased during February $2024.$ A deposit of $10\%$ of the purchase price must be paid in the month of the purchase and the balance is payable in ten equal monthly instalments commencing March $2024.$

$9.$ Ten percent $(10\%)$ of the sales value $($excluding discounts$)$ in excess of R$300000$ will be transferred to