QUESTION $5$

$(20$ Marks$)$

REQUIRED

Prepare the Cash Budget for October, November and December $2023$ from the information provided below.

Note: Where applicable, round off amounts to the nearest Rand. Use separate monetary columns for each month.

INFORMATION

The information given below has been made available by Pep Retailers to assist in the preparation of the cash budget for the fourth quarter of $2023.$

Estimated cash sales after a $10\%$ cash discount are as follows:

$\backslash$table$[[$September$,$R$720000],[$October$,$R$792000],[$November$,$R$864000],[$December$,$R$1044000]]$

Forty percent $(40\%)$ of the sales is for cash and $60\%$ is on credit.

Payments by debtors for credit sales are received in the month after the sale.

Expected inventory purchases $($excluding discounts$)$ are as follows:

$\backslash$table$[[$September$,$R$960000],[$October$,$R$1040000],[$November$,$R$1120000],[$December$,$R$680000]]$

Inventory purchases are paid for in the month of the purchase to take advantage of a $10\%$ discount.

$5.$ Details regarding recurring monthly expenses are as follows:

$5\mathrm{.}1$ The salary bill for December $2023$ is R$316800,10\%$ more than the salaries for each of the preceding two months.

$5\mathrm{.}2$ Other monthly expenses are paid monthly and amount to R$384000,$ including depreciation of R$80000.$

$6.$ Pep Retailers is expected to obtain a long$-$term loan of R$560000$ on $01$ November $2023$ with an expansion project in mind for $2024.$ Interest is charged at $18\%$ per annum. Capital repayments of R$20000$ and interest are to be paid monthly, commencing $30$ November $2023.$

$7.$ The annual property rates will be paid $01$ November $2023.$ The assessment for the year is calculated at R$4$ per R$100$ of the property value. The property is valued at R$1800000.$

$8.$ Pep Retailers expects to have an unfavourable bank balance of R$100000$ on $30$ September $2023.$