Answer Happy

QUESTION 4Read the below information and answer the following questionsINFORMATIONExtract of the Statement of Comprehensive Income for the monthended 31 May 2022RSales 100 000Cost of sales 50 000Rent income 2 500Advertising 5 000Salaries and wages 15 000Rates and taxes 900Other operating expenses 20 000Additional information1. Sales are expected to increase by 20% each month.2. Thirty percent (30%) of the sales is for cash and the balance ison credit. Collections from credit sales are asfollows:* 30% in the month of the sale, and these customers are entitled toa discount of 5%;* 65% in the month after the sale.The balance is usually written off as bad debts.3. Inventories are kept at a constant level. The business uses afixed mark-up of 100% on cost. All purchases arefor cash.4. In terms of the lease agreement, the rental will increase by R3000 per annum with effect from 01 July 2022. Rentis received monthly.5. Advertising is paid monthly and is estimated to be the samepercentage of sales as for May 2022.6. Salaries and wages will increase by 10% with effect from 01 June2022.7. Rates and taxes will be paid in one instalment for the yearduring July 2022. Rates are calculated at80 cents (R0.80) per R100 on the value of the premises. Thepremises are valued at R1 500 000.8. Other operating expenses are expected to increase by 5% permonth. These expenses are paid for in the monthin which they are incurred.9. The balance in the bank on 31 May 2022 is expected to be R25000.Use the information given above to prepare the following for LyonEnterprises for June and July 2022:4.1 Debtors Collection Schedule (4 marks)4.2 Cash Budget (16 marks)