NSC Accounting Analysis of cash budget: GLYDIS TRADERS

Information is p

Question

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 Calculate the amounts denoted by (i) to (iv) in the extract of the Projected Statement of Comprehensive Income.

4.1.3 Calculate:

- Payments to creditors in July 2022
- Loan amount that will be paid on 1 July 2022

INFORMATION:

A. Sales and purchases:

- Credit sales accounts for 60% of total sales.
- Debtors pay according to the following trend:
  - 40% in the month of sales, subject to a 5% discount
  - 45% in the month following the month of sales
  - 12% two months after the month of sales
  - 3% written off if irrecoverable in the third month after sales
- The mark-up is 75% on cost.
- Stock is replaced in the month of sales. A base stock is maintained.
- 80% of stock is bought for cash.
- Creditors are paid in the second month after the month of purchases.

B. Extract from the Projected Statement of Comprehensive Income:

- Gross profit: 427 500
- Commission income: 79 800 (ii)
- Bad debts: 16 800 (iii)
- Salaries and wages: 196 980 (iv)
- Discount allowed: 12 180
- Interest on loan: 4 025

C. Additional information:

- Commission income is fixed percentage of total sales.
- All credit sales will receive a 5% increase from 1 July 2022.
- Peter is informed that the loan paid on 1 July 2022, interest at 14% p.a. is payable on the outstanding balance, on the last day of each month.

Month	Credit Sales	Collections from Debtors
April 2022	567,000	0
May 2022	577,500	259,875
June 2022	609,000	227,430
July 2022	609,000	231,420
Total		555,345

GLYDIS TRADERS Information is provided for the budget period ending 31 July 2022 - NSC Accounting - Question 4 - 2022 - Paper 2

Worked Solution & Example Answer:GLYDIS TRADERS Information is provided for the budget period ending 31 July 2022 - NSC Accounting - Question 4 - 2022 - Paper 2

Complete the Debtors' Collection Schedule for July 2022

Calculate the amounts denoted by (i) in the extract of the Projected Statement of Comprehensive Income

Calculate the amounts denoted by (ii) in the extract of the Projected Statement of Comprehensive Income

Calculate the amounts denoted by (iii) in the extract of the Projected Statement of Comprehensive Income

Calculate the amounts denoted by (iv) in the extract of the Projected Statement of Comprehensive Income

Payments to creditors in July 2022

Loan amount that will be paid on 1 July 2022

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