Question

QUESTION FOUR [20]
Logistics Industries appoint you as their financial consultant. You are required to ascertain the
cash position of the business. The following projections have been made for 2017:
MAY JUNE JULY
Rand Rand Rand

Cash sales 25 000 30 000 35 000
Credit sales 40 000 50 000 60 000

Cash purchases 5 000 6 000 8 000
Credit purchases 20 000 15 000 10 000
Additional information:
1. Collection of credit sales:
30% in the month of the sale to be allowed a 5% discount.
50% one month after the sale
20% two months after the sale
2. Credit purchases are paid one month after the purchases
3. Rent expenses amount to R8 000 per month and is payable on the first day of each
month.
4. Wages are R6 500 per month, and will increase to R7 000 on 1 July 2017.
5. A new computer is expected to be purchased for R10 000 cash in June 2017.
6. The expected bank balance on 30 April 2017 is R20 000 unfavourable.
Required:
4.1 Debtors‟ collection schedule for May, June and July 2017. (6)
4.2 Cash Budget Statement for the three months ending 31 July 2017. (14)

Answer 1