You are provided with the incomplete Debtors’ Collection Schedule and Cash Budget of Zeppo Bazaar - NSC Accounting - Question 6 - 2017 - Paper 1

The Debtors' Collection Schedule for March 2017 should reflect the expected collection pattern based on previous credit sales and payments received:

1. The owner is concerned because actual amounts collected from debtors in February (R43,870) were less than the budgeted amount (R67,490). This indicates cash flow issues.

2. Credit terms are set at 30 days, yet 48% of debtors are taking 60 days or more to settle their debts, which could hamper the liquidity of the business.

One potential solution is to offer discounts for early or prompt payments. This could incentivize customers to settle their debts within the required timeframe.

a) Payment to creditors = R87,500 × 95% = R83,125.

b) Salaries of sales assistants = R20,000 (fixed rate).

The percentage increase in rent can be calculated as:

$\text{Percentage Increase} = \left( \frac{12,544 - 11,200}{11,200} \right) \times 100 = 12\%$

The amount of interest expected can be calculated as follows:

$\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} = R16,830 \times 8\% \times (2/12) = R330$

1. Advertising: The business did not allocate sufficient budget towards advertising to influence sales effectively. Suggestion: Increase the advertising budget to boost sales and visibility.

2. Stationery: There is excessive expenditure on stationery. Suggestion: Minimize waste and manage purchases efficiently.