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

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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 ... 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.

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Answer

For July 2022, the Debtors' Collection Schedule will consider the payments received based on previous sales. The collection from debtors will include:

  • From May 2022 sales: 40% of credit sales for May = 567,000∗40567,000 * 40% = 226,800 (less 5% discount)
  • From June 2022 sales: 45% of credit sales for June = $68,040
  • From July 2022 sales: 40% of credit sales after accounting for the discount.

Overall, total receipts from debtors for July will be calculated accordingly.

Step 2

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

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Answer

i) Commission income in July 2022:

Sales for July: $1,015,000 Commission rate: 8%

Calculation:

Commission income = 1,015,000∗0.08=1,015,000 * 0.08 = 81,200

ii) Bad debts written off in July 2022:

Bad debts calculation for July:

Bad debts for May: 567,000∗3567,000 * 3% = 17,010

iii) Salaries and wages in June:

Total salaries = 196,980−196,980 - 38,980 = $158,000

iv) Discounts allowed in June 2022:

Discounts = 227,430∗40227,430 * 40% * 5% = 11,970

Step 3

Payments to creditors in July 2022

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Answer

Payments to creditors in July can be determined from purchases in May:

Total purchases: 962,500Percentageofcreditsales:60Amountpayable=962,500 Percentage of credit sales: 60% Amount payable = 962,500 * 60% / 0.75 = $110,000

Step 4

Loan amount that will be paid on 1 July 2022

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Answer

To calculate the loan payment on 1 July 2022:

Loan amount: 525,Xandinterestrate:14Totalpaymentincludes:525, X and interest rate: 14% Total payment includes: 390,000 + (0.14 * remaining balance) Final amount payable = $45,000

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