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GLYDIS TRADERS Information is provided for the budget period ending 31 July 2022 - NSC Accounting - Question 4 - 2022 - Paper 2
Question 4
GLYDIS TRADERS Information is provided for the budget period ending 31 July 2022. REQUIRED: 4.1.1 Complete the Debtors' Collection Schedule for July 2022. 4.1.2 C... show full transcript
Worked Solution & Example Answer:GLYDIS TRADERS Information is provided for the budget period ending 31 July 2022 - NSC Accounting - Question 4 - 2022 - Paper 2
Step 1
Complete the Debtors' Collection Schedule for July 2022.
Answer
To complete the Debtors' Collection Schedule for July 2022:
-
Calculate Credit Sales:
- Total sales for July = R1,015,000
- Credit sales = 60% of total sales = $0.60 imes 1,015,000 = R609,000.
-
Determine Receipts from Debtors:
- May sales = R962,500 (40% received in July - 5% discount)
- June sales = R997,500 (45% received in July)
- July sales = R609,000 (40% received in July - 5% discount).
Calculation:
- From May:
- Amount received: R962,500 * 0.40 * 0.95 = R364,300
- From June:
- Amount received: R997,500 * 0.45 = R448,875
- From July:
- Amount received: R609,000 * 0.40 * 0.95 = R231,420
-
Total Receipts from Debtors:
- Total Receipts = R364,300 + R448,875 + R231,420 = R1,044,595.
The Debtors' Collection Schedule for July 2022 would be:
| Month | Credit Sales | Receipts from Debtors |
|-------------|--------------|------------------------|
| April 2022 | 567,000 | 68,040 |
| May 2022 | 577,500 | 259,875 |
| June 2022 | 609,000 | 431,420 |
| July 2022 | 609,000 | 231,420 |
| Total | | 1,044,595 |
Step 2
Calculate the amounts denoted by (i) to (iv) in the extract of the Projected Statement of Comprehensive Income.
Answer
To calculate the amounts:
(i) Commission income in July 2022:
- Formula: Total sales * Commission rate.
- Total sales = R1,015,000; Commission rate = 8%.
- Calculation: R1,015,000 * 0.08 = R81,200.
(ii) Bad debts written off in July 2022:
- Formula: Calculate as 3% of total credit sales.
- Total credit sales = R567,000 or R549,000 (actual collected amounts).
- Calculation: 3% of R567,000 = R17,010.
(iii) Salaries and wages in June 2022:
- From the provided information = R196,980.
(iv) Discount allowed in June 2022:
- Amount = 5% of the balance subject to discounts, calculated from the July target.
- Calculation: R227,430 * 0.05 = R11,970.
Step 3
Payments to creditors in July 2022
Answer
Payments to creditors in July 2022 can be calculated as follows:
- Calculation: Amount due based on the purchases made in May, which are paid in July.
- Total purchases for May at 60% of sales = R962,500 * 0.60 = R577,500.
- Amount payable out of this figure = R110,000.
Thus, payments to creditors in July 2022 is R110,000.
Step 4
Loan amount that will be paid on 1 July 2022
Answer
To determine the amount of the loan that will be paid on 1 July 2022:
- The loan amount was R525,000 with a rate of 14% per annum.
- Calculation: Monthly repayment = $525,000 * 0.014 = R7,350.
- Thus, the amount of the loan to be paid on 1 July 2022 is R45,000.