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The information relates to JR Sanitisers (Pty) Ltd - NSC Accounting - Question 3 - 2022 - Paper 2
Question 3
The information relates to JR Sanitisers (Pty) Ltd. The CEO is Juanita Rose. James Peter is the bookkeeper. 3.1 Complete the Creditors' Payment Schedule for Decembe... show full transcript
Worked Solution & Example Answer:The information relates to JR Sanitisers (Pty) Ltd - NSC Accounting - Question 3 - 2022 - Paper 2
Step 1
Complete the Creditors' Payment Schedule for December 2022.
Answer
To complete the Creditors' Payment Schedule for December 2022:
- Start by identifying the total credit purchases for December, which is R66,300.
- Calculate payments based on the percentage of credit purchases from previous months:
- For October's credit purchases, 80% is paid this month.
- For November's credit purchases, 95% is paid this month.
- Sum these values to find the total payments scheduled for December 2022.
Step 2
Calculate missing figures (i) to (iii) in the Cash Budget.
Answer
For the Cash Budget:
- (i) Calculate the collection from debtors for December 2022:
- R643,500 * 70% = R450,450.
- (ii) Calculate the rent income for December 2022:
- R15,000 + R18,750 = R33,750.
- (iii) Calculate salaries for November 2022:
- (R55,595 - R1,840) = R39,000.
Step 3
Calculate the deposit that will be paid for the purchase of the company vehicle during December 2022.
Answer
To calculate the deposit for the company vehicle:
- Use the formula:
- Deposit = Total Cost * Percentage Deposit
- Given:
- Total Cost = R604,800
- Percentage Deposit = 25%
- Calculation:
- Deposit = R604,800 * 0.25 = R151,200.
Step 4
Juanita is concerned about the cash position for December 2022. She proposes moving the purchase of the vehicle to January 2023.
Answer
To analyze the cash position with the vehicle purchase deferred:
- Adjust the December Cash Budget to show a Deposit of R0 for the vehicle.
- Calculate the revised cash deficit/surplus, taking into account this change and including all other budget figures.
Step 5
Provide TWO points to indicate whether Juanita's decisions were wise regarding advertising.
Answer
- Evaluating the actual amount spent on advertising shows that it was R120,000 while the budget was R100,000. This indicates a lack of control over advertising expenses, which can lead to budget overruns.
- The increase in sales due to higher advertising spend may show effectiveness, but the overspend can dilute profit margins, indicating poor planning.
Step 6
Explain why Juanita should be concerned about the actual amount spent on repairs and maintenance during October 2022.
Answer
Juanita should be concerned because:
- The actual spend was R22,000 while the budget was R30,000, resulting in an underspend of R8,000, which suggests either an underestimation of necessary repairs or neglect in maintenance, impacting future productivity.
- Such discrepancies may lead to larger repair needs in the future if not addressed.
Step 7
Explain whether James' opinion on delivery expenses and packing material is correct or not.
Answer
James' opinion is correct based on the analysis of the expenses:
- Delivery expenses have increased by R4,390, which is beyond the budget, indicating a lack of control.
- Packing material costs also exceeded the budget by R14,486. Both factors suggest that there are significant variances that need to be analyzed for better forecasting.
Step 8
Name THREE additional payments that must be included in the January 2023 budget.
Answer
Three additional payments that should be included in the January 2023 budget are:
- Additional courier services for transport and carriage costs.
- IT maintenance for the online shopping platform.
- Advertising costs to publicize the new online shopping venture.