REQUIRED Use the following information provided by Ashton Enterprises to prepare the: 5.1 Debtors Collection Schedule for January and February 2021. 5.2 Cash Budget for January and February 2021. Note: Where applicable, round off amounts to the nearest Rand. INFORMATION The bank balance on 31 December 2020 is expected to be R40 000 (favourable). Expected credit sales are as follows: December 2020 R360 000 1. 2. 3. 4. * January 2021 R390 000 Credit sales usually make up 60% of the total sales. Cash sales make up the balance. Credit sales are normally collected as follows: 20% in the month in which the transaction took place. These debtors are entitled to a 5% discount. 75% in the following month. The rest is usually written off as bad debts. 5. The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. The ratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after the purchase. Cash purchases of inventory are subject to a 10% discount. 6. The salaries for February 2021 are expected to amount to R114 480, after an 8% increase takes effect on 01 February 2021. 7. Interest at 15% per annum on the loan balance is paid at the end of each month. The loan balance on 01 January 2021 is expected to be R200 000 and capital repayments of R20 000 are made at the end of each month. 8. Part of the building is sublet to a tenant. The rent expense for the year ended 31 December 2020 is R131 000. The rental increases by 10% on 01 February each year. Rent is received monthly. 9. Other operating expenses are estimated at R28 000 per month. This amount excludes R2 000 for depreciation. Sixty percent (60%) of the operating expenses are paid for in the month in which they are incurred. The rest is paid in the following month. * February 2021 R420 000 "I
REQUIRED Use the following information provided by Ashton Enterprises to prepare the: 5.1 Debtors Collection Schedule for January and February 2021. 5.2 Cash Budget for January and February 2021. Note: Where applicable, round off amounts to the nearest Rand. INFORMATION The bank balance on 31 December 2020 is expected to be R40 000 (favourable). Expected credit sales are as follows: December 2020 R360 000 1. 2. 3. 4. * January 2021 R390 000 Credit sales usually make up 60% of the total sales. Cash sales make up the balance. Credit sales are normally collected as follows: 20% in the month in which the transaction took place. These debtors are entitled to a 5% discount. 75% in the following month. The rest is usually written off as bad debts. 5. The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. The ratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after the purchase. Cash purchases of inventory are subject to a 10% discount. 6. The salaries for February 2021 are expected to amount to R114 480, after an 8% increase takes effect on 01 February 2021. 7. Interest at 15% per annum on the loan balance is paid at the end of each month. The loan balance on 01 January 2021 is expected to be R200 000 and capital repayments of R20 000 are made at the end of each month. 8. Part of the building is sublet to a tenant. The rent expense for the year ended 31 December 2020 is R131 000. The rental increases by 10% on 01 February each year. Rent is received monthly. 9. Other operating expenses are estimated at R28 000 per month. This amount excludes R2 000 for depreciation. Sixty percent (60%) of the operating expenses are paid for in the month in which they are incurred. The rest is paid in the following month. * February 2021 R420 000 "I
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter9: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 8P: Financing Deficit
Stevens Textile Corporation’s 2018 financial statements are shown here:
Balance...
Related questions
Question
100%
Transcribed Image Text:REQUIRED
Use the following information provided by Ashton Enterprises to prepare the:
5.1 Debtors Collection Schedule for January and February 2021.
5.2 Cash Budget for January and February 2021.
Note: Where applicable, round off amounts to the nearest Rand.
INFORMATION
The bank balance on 31 December 2020 is expected to be R40 000 (favourable).
Expected credit sales are as follows:
December 2020
R360 000
1.
2.
3.
4.
5.
6.
7.
8.
9.
*
*
January 2021
R390 000
February 2021
R420 000
11
Credit sales usually make up 60% of the total sales. Cash sales make up the balance.
Credit sales are normally collected as follows:
20% in the month in which the transaction took place. These debtors are entitled to a 5% discount.
75% in the following month.
The rest is usually written off as bad debts.
The mark-up is 25% on cost. The goods that are sold each month are replaced in the same month. The
ratio of cash purchases to credit purchases is 3:1 respectively. Creditors are paid in the month after the
purchase. Cash purchases of inventory are subject to a 10% discount.
The salaries for February 2021 are expected to amount to R114 480, after an 8% increase takes effect
on 01 February 2021.
Interest at 15% per annum on the loan balance is paid at the end of each month. The loan balance on
01 January 2021 is expected to be R200 000 and capital repayments of R20 000 are made at the end of
each month.
Part of the building is sublet to a tenant. The rent expense for the year ended 31 December 2020 is
R131 000. The rental increases by 10% on 01 February each year. Rent is received monthly.
Other operating expenses are estimated at R28 000 per month. This amount excludes R2 000 for
depreciation. Sixty percent (60%) of the operating expenses are paid for in the month in which they are
incurred. The rest is paid in the following month.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning