QUESTION TWO

$[35]$

You are provided with information relating to Dodo's Enterprises for the two months ending $31$

January $2023.$ Mrs Gomo owns the business. The business has overdraft bank facilities of $R50000.$

Sales and Cost of Sales

$\backslash$table$[[,$Actual Sales,Budgeted Sales,Cost of Sales$],[$October $2022,140000,,85000],[$November $2022,160000,,100000],[$December $2022,,180000,125000],[$January $2023,,220000,165000]]$

$20\%$ of the total sales are on credit.

Debtors are expected to pay their accounts as follows:

$-70\%$ in the month following the month of the sale.

$-28\%$ two months following the month of the sale.

$2\%$ is to be written off in the third month following the month of the sale.

A fixed level of trading stock on hand is maintained throughout the year through replacement monthly.

Purchases of stock:

$65\%$ of all stock is bought on credit.

Creditors are paid in full in the month following the month of purchase to qualify for a $5\%$ discount.

It has been agreed that the owner Mrs$.$ Gomo, will take unused equipment at book value in