QUESTION $5(20$ Marks$)$

REQUIRED

Use the following information provided by Heinmann Limited to:

$5\mathrm{.}1$ Prepare a Debtors Collection Schedule for July and August $2019.(6$ marks$)$

$5\mathrm{.}2$ Prepare the Cash Budget for July and August $2019.(14$ marks$)$

Note: Where applicable, round off all amounts to the nearest Rand.

INFORMATION

$1.$ Heinmann Limited expects to have an unfavourable bank balance of R$10000$ on $30$ June $2019.$

$2.$ Total sales figures for $2019$ are as follows:

April

May

June

July

August

Actual $($R$)$

Budgeted $($R$)$

Total sales

$480000$

$525000$

$510000$

$550000$

$580000$

$3.50\%$ of sales are cash sales.

$3.$ Debtors settle their accounts as follows:

$$h $40\%$ one month after the sale $$V a discount of $5\%$ is given to these debtors

$$h $55\%$ two months after the sale

$$h $5\%$ is written off as bad debts

$4.$ Purchases of inventory for $2019$ are as follows:

May

June

July

August

Total purchases $($R$)$

$220000$

$230000$

$265000$

$280000$

$5.40\%$ of the purchases are for cash. The balance is purchased on credit. Creditors are paid one month after the month of purchase.

$6.$ The proprietor will make the following drawings during July:

$$h Trading stock R$12000$

$$h Cash R$15000$

$7.$ Monthly salaries amount to R$22000.$ Salaries will increase by $8\%$ with effect from $01$ August $2019.$

$8.$ A fixed deposit of R$70000$ will be made on $1$ July $2019.$ Interest at $8\%$ per annum will be received monthly on this fixed deposit.

$9.$ Equipment costing R$80000$ was purchased on $30$ June $2019.$ A deposit of R$20000$ was paid on this date. The balance will be paid in three equal monthly instalments commencing on $30$ July $2019.$

$10.$ Other cash operating expenses amounted to R$70000$ for June $2019$ and are expected to increase by $10\%$ from $1$ July $2019.$

$11.$ Property rates and taxes are paid annually and amount to R$2000$ per month. An annual payment is made on $15$ August every year.

$12.$ Rentals of R$18000$ per month are paid monthly. Rentals are expected to increase by $8\%$ per annum with effect from $1$ August $2019.$