Answer Happy

Question 4 Use the information provided below to prepare thefollowing for January and February 2023: 4.1 Debtors CollectionSchedule (4 marks) Cash Budget (16 marks) INFORMATION The followinginformation was provided by Intel Enterprises: 1. The bank balanceon 31 December 2022 is expected to be R40 000 (unfavourable). 2.Credit sales are expected to be as follows: December 2022 January2023 February 2023 R576 000 R540 000 R648 000 3. Credit salesusually make up 40% of the total sales. Cash sales make up thebalance. Cash customers receive a 10% discount. 4. Credit sales arenormally collected as follows: * 30% in the month in which thetransaction takes place, and these customers are entitled to a 5%discount. * 65% in the following month The rest is usually writtenoff as bad debts. 5. Budgeted purchases of inventory are asfollows: December 2022 January 2023 February 2023 R1 000 000 R800000 R920 000 4.2 6. Fifty percent (50%) of the purchases are forcash. The remainder is paid in the month after the purchase. 7. Themonthly salaries amount to R150 000. Salaries are expected toincrease by 9% with effect from 01 February 2023 for thoseemployees who presently make up 80% of the salary bill. Thesalaries of the remaining 20% are expected to increase by 6%. 8.Interest at 18% per annum on the loan balance is paid at the end ofeach month. The loan balance on 31 December 2022 was R400 000 and acapital repayment of R100 000 will be made on 01 February 2023. 9.Part of the building is sublet to a tenant and rent is collectedmonthly. The lease agreement for the year ended 31 January 2023reflected the rental as R180 000 per annum. The rental willincrease by 10% with effect from 01 February 2023. 10. Otheroperating expenses are budgeted at R40 000 per month. This amountincludes R5 000 for depreciation. Operating expenses are paid forin the month in which they are incurred.