LESSON
GRADE 11
95
Cash budgets
ACTIVITY 5
REQUIRED
You are provided with the information from Mighty Traders. You are required to complete the
following for January and February 2013:
Debtors Collection schedule
Cash budget for January and February
INFORMATION
A. EXTRACT FROM THE LIST OF BALANCES ON 01 DECEMBER 2012
Fixed Deposit (8 % p.a.) 24 000
Loan: Future Bank (14 % p.a.) 36 000
B. ACTUAL AND BUDGETED FIGURES
Actual Budgeted
November December January February
Credit sales 45 000 48 000 60 000 54 000
Cash sales 50 000 55 000 40 000 36 000
Credit purchases 22 000 23 000 30 000 25 000
95 Accounting Grade 11 - CAPS
[Link]
[Link] is expected that the amounts owed by debtors will be collected as follows:
30 % in the same month in which the transaction took place
50% in the month after the sales take place
15% in the second month after the sales took place
5% is to be written off in the third month after the sales take place
2. The Fixed deposit matures on the 31st of January 2013. Interest on Fixed
Deposit is received at the end of each month.
3. The business will sell the old equipment on 31 January 2013 for R3 000 cash.
New equipment will be purchased on credit for R34 000 in February .The supplier
will require a deposit of R4 000 and the balance will be paid over six months
commencing in March 2013.
4. Depreciation will increase from R6 700 to R7 000 from January 2013.
5. Credit purchases are paid in full in the month following the purchases transaction
month. A discount of 5% is received for this payment
6. The loan from Mayibuye Bank was made on 01 November .Half of the loan will be
repaid on 31 January 2013 .Interest on loan must be paid monthly.
7. The business employs three shop assistants at a salary of R4 000 each per
month. On 31 January one of the assistants will leave the business. The other
two assistants will receive the increase R1 000 each per month with effect from
01 February.
8. Part of building is let at R2 500 per month .The rent received will increase by 15%
on 01 February.
9. Mighty Traders has an unfavourable bank balance of R6 200.
Note: The interest on Fixed deposit and Loan Account is not capitalised.
95 Accounting Grade 11 - CAPS
ANSWER
DEBTORS’ COLLECTION SCHEDULE – MIGHTY TRADERS
Credit sales Debtors collection
January February
November
December
January
February
Expected receipts
CASH BUDGET OF MIGHTY TRADERS – 01January - 28 February 2013
RECEIPTS January February
Cash sales
Receipts from debtors
PAYMENTS
Cash purchases
95 Accounting Grade 11 - CAPS
ANSWERS LESSON
95
ACTIVITY 5
DEBTORS’ COLLECTION SCHEDULE – MIGHTY TRADERS
Credit sales Debtors collection
January February
November 45 000 x 15% 6 750
December [48 000 x 50%] [48 000 x 15%] 24 000 7 200
January [60 000 x 30%] [60 000 x 50%] 18 000 30 000
February [54 000 x 30%] 16 200
Expected receipts 48 750 53 400
CASH BUDGET OF MIGHTY TRADERS – 01January - 28 February 2013
RECEIPTS January February
Cash sales 40 000 36 000
Receipts from debtors 48 750 53 400
Rent income 2 500 X (115 ÷ 100) 2 500 2 875
Fixed Deposit 24 000
Interest on fixed deposit (24 000 x 8% ) ÷ 12 160
Equipment 3 000
TOTAL RECEIPTS 118 410 92 275
PAYMENTS
Cash purchases of stock 20 000 17 000
Payments to creditors 21 850 28 500
Salaries [J,4 000 x 3] [F,5 000 x 2] 12 000 10 000
Loan : Future Bank [36 000 x 50%] 18 000
Equipment 4 000
Other expenses 18 400 19 000
Interest on loan 420 210
TOTAL PAYMENTS 90 670 78 710
Cash Surplus (Shortfall) 27 740 13 565
Bank –Opening balance (6 200) 21 540
Bank –Closing balance 21 540 35 105
95 Accounting Grade 11 - CAPS
Workings
Payment to creditors
January: 23 000 x (100% -5%)
23 000 x 95% = 21 850
February: 30 000 x 95% = 28 500
Interest on loan
January :( 36 000 x 14%) ÷12 = 420
February :( 18 000 x 14%) ÷12 = 210
95 Accounting Grade 11 - CAPS
