QUESTION $4$

$(20$ Marks$)$

REQUIRED

Use the information provided to prepare the following for Wildean Limited for August and September $2025$:

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

$(4$ Marks$)$

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

$(16$ Marks$)$

INFORMATION

The following is the budgeted information for $2025$ provided by Wildean Limited:

A favourable bank balance of R$50000$ is expected at the end of July.

The total sales for June and July are forecast at R$900000$ and R$1000000$ respectively. Sales are expected to increase by $10\%$ per month thereafter. Sixty $(60\%)$ percent of the sales is for cash; the balance is on credit.

Eighty percent $(80\%)$ of the amount owing for credit sales is expected to be received in the month after the sale. The balance is expected to be received two months after the sale.

Seventy percent $(70\%)$ of the purchases of inventory is usually on credit and creditors are paid two months after purchase. The rest of the purchases is for cash to take advantage of a cash discount of $10\%.$ Purchases amount to $50\%$ of sales. Note: Separate entries are required for cash purchases and payments for credit purchases.

Salaries and wages cost R$150000$ per month for June and July. An increase of $12\mathrm{.}5\%$ is scheduled for August.

Rent costs R$240000$ per annum, payable monthly. Insurance is estimated at R$72000$ for the year and is payable in September. Rates are forecast at R$216000$ per year, payable half$-$yearly in August and February. Monthly administration costs, R$26000($excluding R$4000$ for depreciation$),$ are payable in the month in which they are incurred. Note: Separate entries are required for each item.

Advertising expenses are expected to amount to $5\%$ of the monthly sales and are payable in the month after they are incurred.

Machinery with a cost price of R$600000$ is expected to be purchased during August. A deposit of $20\%$ will be paid in August and the balance is payable in six equal monthly instalments commencing September.

A long$-$term loan of R$500000$ at $18\%$ per annum interest is to be raised on $01$ August. Interest on loan and a repayment of R$10000$ is payable at the end of each month