Question

Use the information provided below to prepare the following for February, March, and April 2023: 4.1 Debtors Collection Schedule (6 marks) 4.2 Cash Budget (14 marks) INFORMATION The information given below has been made available by Regent Retailers to assist in the preparation of its cash budget for February to April 2023. 1. The sales forecasts for the first four months of 2023 are as follows: - January: R480 000 - February: R540 000 - March: R580 000 - April: R720 000 2. Forty percent (40%) of the sales are expected to be for cash, and the balance on credit. 3. Payment for 20% of the credit sales is usually received in the month of the sale. The balance is collected in the month after the sale. 4. Expected purchases of inventory are as follows: - January: R260 000 - February: R280 000 - March: R300 000 - April: R360 000 Fifty percent (50%) of the inventory purchases are paid for in the month of purchase to take advantage of a 10% discount. The balance is on credit and is paid in the month after the purchase. 5. Recurring monthly expenses are as follows: - Depreciation: R40 000 - Cash expenses: R200 000 6. Regent Retailers expects to obtain a long-term loan of R300 000 on 31 March 2023. Interest is charged at 15% per annum, and interest is paid monthly, commencing April 2023. 7. Annual property rates will be paid on 01 April 2023, and rates are calculated at R20 per R1 000 of the value of the property. The property is valued at R1 000 000. 8. Regent Retailers expects to have a bank overdraft of R50 000 on 31 January 2023.

          Use the information provided below to prepare the following for February, March, and April 2023: 

4.1 Debtors Collection Schedule (6 marks) 
4.2 Cash Budget (14 marks) 

INFORMATION 

The information given below has been made available by Regent Retailers to assist in the preparation of its cash budget for February to April 2023. 

1. The sales forecasts for the first four months of 2023 are as follows: 
   - January: R480 000 
   - February: R540 000 
   - March: R580 000 
   - April: R720 000 

2. Forty percent (40%) of the sales are expected to be for cash, and the balance on credit. 

3. Payment for 20% of the credit sales is usually received in the month of the sale. The balance is collected in the month after the sale. 

4. Expected purchases of inventory are as follows: 
   - January: R260 000 
   - February: R280 000 
   - March: R300 000 
   - April: R360 000 

   Fifty percent (50%) of the inventory purchases are paid for in the month of purchase to take advantage of a 10% discount. The balance is on credit and is paid in the month after the purchase. 

5. Recurring monthly expenses are as follows: 
   - Depreciation: R40 000 
   - Cash expenses: R200 000 

6. Regent Retailers expects to obtain a long-term loan of R300 000 on 31 March 2023. Interest is charged at 15% per annum, and interest is paid monthly, commencing April 2023. 

7. Annual property rates will be paid on 01 April 2023, and rates are calculated at R20 per R1 000 of the value of the property. The property is valued at R1 000 000. 

8. Regent Retailers expects to have a bank overdraft of R50 000 on 31 January 2023.

Added by Encarnacion B.

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