Complete the Creditors' Payment Schedule for December 2022 - NSC Accounting - Question 3 - 2022 - Paper 2
Question 3
Complete the Creditors' Payment Schedule for December 2022.
Calculate missing figures (i) to (iii) in the Cash Budget.
Refer to Information E and G.
3.3.1 Calcula... show full transcript
Worked Solution & Example Answer:Complete the Creditors' Payment Schedule for December 2022 - NSC Accounting - Question 3 - 2022 - Paper 2
Step 1
Complete the Creditors' Payment Schedule for December 2022
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Answer
To complete the Creditors' Payment Schedule for December 2022:
Begin with November's closing figure of purchases: 251,940.
Calculate the amount to be paid in December based on the payment pattern given (80% of October and 95% of November).
October: 300,900 × 0.80 = 240,720
November: 251,940 × 0.95 = 239,343
Add the two amounts together to find the total for December: 240,720 + 239,343 = 480,063.
Step 2
Calculate missing figures (i) to (iii) in the Cash Budget
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Answer
To calculate the missing figures in the Cash Budget:
(i) Collection from debtors for December 2022: 643,500 × 70% = 450,450.
(ii) Rent income for December 2022: The formula to calculate rent:
15,000 + 18,750 = 33,750.
(iii) Salaries: Calculate as follows:
55,995 - 1,755 = 39,000.
Step 3
3.3.1 Calculate the deposit that will be paid for the purchase of the company vehicle during December 2022
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Answer
The deposit calculation involves:
Starting with the vehicle cost, 20,800 × 24 = 499,200.
Adjust for variations and utilize figures: 453,600 - 151,200 calculated for cash inflow.
Thus, the calculated deposit will be 151,200.
Step 4
3.3.2 Cash position for December 2022
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To show the effect of this proposal:
Budgeted deficit on 31 December 2022: -120,000.
Adjust based on the deposit on the vehicle of 151,200 resulting in:
Cash surplus after proposed changes = 62,700.
Step 5
Provide TWO points regarding Juanita's decisions
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Point 1: Sales units were under budgeted by 1,000 units, indicating poor forecasting.
Point 2: Budgeted advertising costs were exceeded by R120,000, suggesting ineffective allocation of resources.
Step 6
3.5.1 Explain concern about maintenance spending
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Answer
Juanita should be concerned because:
Maintenance costs were underspent by R22,000 from the budget of R30,000, leading to a potential breakdown of crucial machinery. This indicates a need for effective asset management.
Step 7
3.5.2 Explain James's opinion on delivery expenses
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James's opinion is valid because:
Delivery expenses were over budget by R4,390 which indicates a lack of control. Furthermore, sales units sold exceeded budget, yet costs inflated, highlighting inefficiency in expense management.
Step 8
Name THREE additional payments for January 2023 budget
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Additional courier services for delivery.
Additional staff for web management and customer support.
Marketing costs for online promotion and advertising.
