QUESTION $4$

$(20$ Marks$)$

REQUIRED

Use the information provided by Empire Traders to prepare the following for March and April $2024$:

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

$(4$ marks$)$

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

$(16$ marks$)$

INFORMATION

The following information was provided by Empire Traders:

Empire Traders expects to have a favourable bank balance of R$60000$ on $28$ February $2024.$

Budgeted sales figures for $2024$ are as follows:

Thirty percent $(30\%)$ of the cash sales is to informal traders who are entitled to a discount of $10\%.$

Collections from debtors are usually as follows:

$80\%$ is collected in the month after the sale.

$20\%$ is collected two months after the sale.

Purchases of inventory are expected to be as follows:

Sixty percent $(60\%)$ of the purchases is for cash to take advantage of a discount of $15\%.$ The balance is

purchased on credit. Creditors are paid two months after the month of purchase. $($Separate entries for

cash and credit payments are required.$)$

The proprietor's monthly drawings comprise R$12000$ inventory and R$10000$ cash.

The monthly salaries are expected to amount to R$194400$ for April $2024$ after an increase of $8\%$ takes

effect on $01$ April $2024.$

A fixed deposit, R$100000,$ will mature $($expire$)$ on $31$ March $2024.$ Interest at $12\%$ per annum for three

months will also be received.

Equipment with a cost price R$160000$ will be purchased on $31$ March $2024.$ A deposit $25\%$ will be paid

on this date. The balance will be paid in four equal monthly instalments commencing $30$ April $2024.$

Other cash operating expenses are expected to amount to R$160000$ for February $2024$ and are expected

to increase by $5\%$ each month thereafter.