Use the information provided by Tech Talk to prepare the following for March and April 2024: 1.1 Cash Budget 1.2 Debtors Collection Schedule INFORMATION The following information was provided by Tech Talk: 1. Tech Talk expects to have a favourable bank balance of R70 000 on 28 February 2024. Budgeted sales figures for 2024 are as follows: 2. January R420 000 R470 000 3. 4. 5. 6. 7. 8. 9. Cash sales Credit sales February R470 000 R490 000 • 20% is collected two months after the sale. Purchases of inventory are expected to be as follows: January R310 000 Total purchases Thirty percent (40%) of the cash sales is to informal traders who are entitled to a discount of 20%. Collections from debtors are usually as follows: • 80% is collected in the month after the sale. March R610 000 R620 000 February R360 000 April R650 000 R600 000 March R300 000 April R280 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R13 000 inventory and R11 000 cash. The monthly salaries are expected to amount to R195 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. A fixed deposit, R110 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. Equipment with a cost price R150 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.
Use the information provided by Tech Talk to prepare the following for March and April 2024: 1.1 Cash Budget 1.2 Debtors Collection Schedule INFORMATION The following information was provided by Tech Talk: 1. Tech Talk expects to have a favourable bank balance of R70 000 on 28 February 2024. Budgeted sales figures for 2024 are as follows: 2. January R420 000 R470 000 3. 4. 5. 6. 7. 8. 9. Cash sales Credit sales February R470 000 R490 000 • 20% is collected two months after the sale. Purchases of inventory are expected to be as follows: January R310 000 Total purchases Thirty percent (40%) of the cash sales is to informal traders who are entitled to a discount of 20%. Collections from debtors are usually as follows: • 80% is collected in the month after the sale. March R610 000 R620 000 February R360 000 April R650 000 R600 000 March R300 000 April R280 000 Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for cash and credit payments are required.) The proprietor's monthly drawings comprise R13 000 inventory and R11 000 cash. The monthly salaries are expected to amount to R195 400 for April 2024 after an increase of 8% takes effect on 01 April 2024. A fixed deposit, R110 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three months will also be received. Equipment with a cost price R150 000 will be purchased on 31 March 2024. A deposit 25% will be paid on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024. 10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected to increase by 5% each month thereafter.
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 11SEP
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Use the information provided by Tech Talk to prepare the following for March and April 2024:
1.1 Cash Budget
1.2 Debtors Collection Schedule
INFORMATION
The following information was provided by Tech Talk:
1. Tech Talk expects to have a favourable bank balance of R70 000 on 28 February 2024.
2. Budgeted sales figures for 2024 are as follows:
January
R420 000
R470 000
3.
4.
5.
6.
7.
Cash sales
Credit sales
9.
February
R470 000
R490 000
Total purchases
March
R610 000
R620 000
Thirty percent (40%) of the cash sales is to informal traders who are entitled to a discount of 20%.
Collections from debtors are usually as follows:
• 80% is collected in the month after the sale.
20% is collected two months after the sale.
Purchases of inventory are expected to be as follows:
January
R310 000
February
R360 000
April
R650 000
R600 000
March
R300 000
Sixty percent (60%) of the purchases is for cash to take advantage of a discount of 15%. The balance is
purchased on credit. Creditors are paid two months after the month of purchase. (Separate entries for
cash and credit payments are required.)
The proprietor's monthly drawings comprise R13 000 inventory and R11 000 cash.
The monthly salaries are expected to amount to R195 400 for April 2024 after an increase of 8% takes
effect on 01 April 2024.
8.
A fixed deposit, R110 000, will mature (expire) on 31 March 2024. Interest at 12% per annum for three
months will also be received.
Equipment with a cost price R150 000 will be purchased on 31 March 2024. A deposit 25% will be paid
on this date. The balance will be paid in four equal monthly instalments commencing 30 April 2024.
10. Other cash operating expenses are expected to amount to R160 000 for February 2024 and are expected
to increase by 5% each month thereafter.
April
R280 000
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