Use the information provided below to prepare the following for Xpanda Limited for February and March 2022:
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Debtors Collection Schedule
Cash Budget.
INFORMATION
The following budgeted information was made available by Xpanda Limited for 2022:
1.
An overdrawn bank balance of R125 000 is expected on 31 January 2022.
2.
Forty percent (40%) of all sales are for cash; the balance is on credit. Sales for January and February 2022 (excluding discounts) are expected to be R640 000 and R900 000 respectively. Sales are expected to increase by 10% during March 2022. Twenty percent (20%) of the cash sales are to wholesalers and they are entitled to a discount of 10%.
Thirty percent (30%) of the sales on credit is expected to be collected in the month of the sale for a cash discount of 5%. The balance is expected to be collected one month later.
3.
Xpanda Limited sells its goods at cost plus 60%. All goods that are sold each month are replaced in the same month. Fifty percent of the purchases are for cash and the balance on credit. Creditors are paid in the month after the purchase.
4.
Salaries and wages will cost R216 000 for March 2022, after an 8% increase takes effect from 01 March 2022.
5.
Rent expense costs R240 000 per annum, payable monthly. Insurance costs R5 000 per month and the premiums for 12 months will be paid at the end of February 2022 in order to take advantage of a 10% discount offered by the insurer. Municipal rates amount to R200 000 per year, paid half-yearly in February and August. Monthly administration costs are forecast at R75 000 (including R15 000 for depreciation) and are payable in the month in which they are incurred.
6.
Advertising expenses are estimated at 5% of the monthly sales (excluding discounts), and are paid one month in arrears.
7.
Equipment with a cost price of R1 000 000 is expected to be purchased during February 2022. A deposit of R100 000 will be paid during February 2022 and the balance is payable in six equal installments commencing March 2022.
8.
A long-term loan of R500 000 at 18% per annum interest is to be raised on 01 February 2022. A capital repayment of R20 000 and interest are payable monthly, with the first payment due on 28 February 2022.
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
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