QUESTION 4 Read the below information and answer the following questions INFORMATION Extract of the Statement of Compreh
Posted: Wed Jul 06, 2022 6:00 am
QUESTION 4 Read the below information andanswer the following questions INFORMATION Extract of the Statementof Comprehensive Income for the month ended 31 May 2022
R Sales 100 000
Cost of sales 50 000
Rent income 2 500
Advertising 5 000
Salaries and wages 15 000
Rates and taxes 900
Other operating expenses 20 000
Additional information
1. Sales are expected to increase by 20% each month.
2. Thirty percent (30%) of the sales is for cash and the balanceis on credit. Collections from credit sales are as follows:
* 30% in the month of thesale, and these customers are entitled to a discount of 5%Íž
* 65% in the month after thesale. 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 are for cash.
4. In terms of the lease agreement, the rental will increase byR3 000 per annum with effect from 01 July 2022. Rent is receivedmonthly.
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 01June 2022.
7. Rates and taxes will be paid in one instalment for the yearduring July 2022. Rates are calculated at 80 cents (R0.80) per R100on the value of the premises. The premises are valued at R1 500000.
8. Other operating expenses are expected to increase by 5% permonth. These expenses are paid for in the month in which they areincurred.
9. The balance in the bank on 31 May 2022 is expected to be R25000
Use the information given above to prepare the followingfor Lyon Enterprises for June and July 2022:
4.1 Debtors Collection Schedule
4.2 Cash Budget
R Sales 100 000
Cost of sales 50 000
Rent income 2 500
Advertising 5 000
Salaries and wages 15 000
Rates and taxes 900
Other operating expenses 20 000
Additional information
1. Sales are expected to increase by 20% each month.
2. Thirty percent (30%) of the sales is for cash and the balanceis on credit. Collections from credit sales are as follows:
* 30% in the month of thesale, and these customers are entitled to a discount of 5%Íž
* 65% in the month after thesale. 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 are for cash.
4. In terms of the lease agreement, the rental will increase byR3 000 per annum with effect from 01 July 2022. Rent is receivedmonthly.
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 01June 2022.
7. Rates and taxes will be paid in one instalment for the yearduring July 2022. Rates are calculated at 80 cents (R0.80) per R100on the value of the premises. The premises are valued at R1 500000.
8. Other operating expenses are expected to increase by 5% permonth. These expenses are paid for in the month in which they areincurred.
9. The balance in the bank on 31 May 2022 is expected to be R25000
Use the information given above to prepare the followingfor Lyon Enterprises for June and July 2022:
4.1 Debtors Collection Schedule
4.2 Cash Budget