LESSON
GRADE 11
95
WEEK 28 - Lesson 7 of 12
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
November
Budgeted
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
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95 Accounting Grade 11 - CAPS
3.Transactions
1.It 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.
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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
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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%]
February
[54 000 x 30%]
Expected receipts
18 000
30 000
16 200
53 400
48 750
CASH BUDGET OF MIGHTY TRADERS – 01January - 28 February 2013
RECEIPTS
January
February
Cash sales
Receipts from debtors
Rent income 2 500 X (115 ÷ 100)
Fixed Deposit
Interest on fixed deposit (24 000 x 8% ) ÷ 12
Equipment
TOTAL RECEIPTS
PAYMENTS
Cash purchases of stock
Payments to creditors
Salaries [J,4 000 x 3] [F,5 000 x 2]
Loan : Future Bank [36 000 x 50%]
Equipment
Other expenses
Interest on loan
TOTAL PAYMENTS
Cash Surplus (Shortfall)
Bank –Opening balance
Bank –Closing balance
40 000
48 750
2 500
24 000
160
3 000
118 410
36 000
53 400
2 875
20 000
21 850
12 000
18 000
17 000
28 500
10 000
18 400
420
90 670
27 740
(6 200)
21 540
92 275
4 000
19 000
210
78 710
13 565
21 540
35 105
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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
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95 Accounting Grade 11 - CAPS