QUESTION $4$

$(20$ Marks$)$

REQUIRED

Use the information given below to prepare the following for January, February and March $2025$:

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

$(6$ marks$)$

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

$(14$ marks$)$

INFORMATION

The following data and estimates are available for Dunlop Limited for the period $01$ December $2024$ to March $2025$:

$\backslash$table$[[,$December $2024,$January $2025,$February $2025,$March $2025],[$Credit sales,R$100000,$R$170000,$R$190000,$R$230000],[$Wages$,$R$130000,$R$150000,$R$186000,$R$184000],[$Fixed overheads,R$64000,$R$64000,$R$64000,$R$64000],[$Variable overheads,R$40000,$R$76000,$R$84000,$R$101000],[$Direct materials,R$102000,$R$114000,$R$94000,$R$104000]]$

Additional information

Seventy five percent $(75\%)$ of the sales is expected to be for cash and the balance on credit.

Collections from credit sales are as follows:

$40\%$ in the month of the sale

$60\%$ in the month after the sale.

Since wages are paid on specific days, only $80\%$ of a month's budgeted wages are paid in that month. The rest is paid in the following month.

Fixed overheads are paid in the month in which they are incurred.

Payment of the variable overheads is delayed by one month.

Sixty percent $(60\%)$ of the direct materials will be purchased for cash and the rest on credit. Creditors are paid in the month after the purchase.

A loan of R $400000$ is to be obtained on $31$ March $2025$ to finance the expansion of the business commencing April $2025.$

The cash balance on $01$ January $2025$ is expected to be R $75000($unfavourable$).$