QUESTION $4$

$(20$ Marka$)$

REQUIRED

Use the information provided below fo prepare the followng for $.$ July and August $2025.$

$4\mathrm{.}1$ Deblors Collection Schedule

$(4$ Marks$)$

$4\mathrm{.}2$ Cash Budget.

$(16$ Marks$)$

INFORMATION

The following information is available from Oftil Limited lo assist in the preparation of the cash budget for July and August $2025.$

The credit sales for May and June $2025$ were budgeted at R$1080000$ and R$2160000$ respectively. Credit sales of R$4320000$ and R$3240000$ have been forecast for July and August $2025$ respectively.

Histarically $60\%$ of the company's sales has been for cash and the rest on credit.

Forty percent $(40\%)$ of the credit sales is usually collected in the month of the sale and the rest in the month after the sale. Debtors who pay in the month of the sale are entitled to a discount of $5\%.$

During August $2025,$ the company expects to receive a dividend of $9$ cents per share on the $80000$ shares that it holds in Samcor Limited.

$5$ The company's purchases of inventones each month are budgeted at $50\%$ of the sales value of the same month. Thirty percent $(30\%)$ of the purchases amount is for cash and the balance is payable in the month after the purchase. $($Separate entres are required for cash purchases and payments for credi purchases$)$

Rent is payable monthly. The rent for the year ended $31$ July $2025$ and $31$ July $2026$ amounts to R$345600$ and R$380160$ respectively.

$7$ The fixed salary cost for the year is R$1728000.$ Salanes are paid on the last working day of each month

B$.$ Interest on loan at a rate of $18\%$ per year is payable at the end of each month on the loan balance. The ban balance is expected to amount to R$400000$ on $30$ June $2025.$ Payments of R$10000$ per month will also be made at the end of each month to reduce the loan balance.

New machinery that cost R$960000,$ and subject to a $10\%$ trade discount, will be purchased and paid for during July $2025$

Other cash operating expenses are budgeted at R$300000$ for June $2025$ and are expected to increase by $5\%$ each month thereafter.

Cash in the bank on $30$ June $2025$ is forecast ar R$120-000$