#117 The cash balance on 31 January 2021 is expected to have

The cash balance on 31 January 2021 is expected to have - Accounting

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INFORMATION
1. The cash balance on 31 January 2021 is expected to have a debit balance of R10000.
2. Total sales are expected to be as follows

3. Cash sales usually make up 60% of the total sales. The balance of the sales is on credit.
4. Credit sales are normally collected as follows:
 60% in the month of the sale;
40% in the month after the sale.
5. Expected purchases of inventory are as follows:

6. Creditors are paid in the month after the purchase.
7. The monthly salaries amount to R150 000. Salaries are expected to increase by 10% with effect from 01 March 2021.
8. Interest, calculated at 6% per annum on the fixed deposit (investment) account of R50 000, is receivable at the end of each month.
9. Part of the building is sublet to a tenant. The lease agreement for the year ended 29 February 2021 reflected the rental at R10 000 per month. The rental will increase by 12% on 01 March 2021.
10. Other cash operating expenses are expected to amount to R90 500 for January 2021. An increase of R1 500 is expected each month thereafter.
REQUIRED
Use the following information provided by AVIS Limited to prepare the
2.1 Debtors Collection Schedule for February and March 2021.
2.2 Cash Budget for February and March 2021.
Note: Use separate amount columns for each month. Where applicable, round off amounts to the nearest Rand.
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2.1

Cash collections schedule
	February	March
Cash Sales	300,000	336,000
Credit Sales Collection
Jan Sales	96,000
Feb Sales	120,000	80,000
Mar Sales		134,400
Total Cash Collections	516,000	550,400

For only Debtor Collection, cash sales can be ignored
2.2

Cash Budget
	February	March
Beginning Balance	10,000	(95,750)
Cash Receipts
Cash Collections from Customers	516,000	550,400
Interest Received	250	250
Rent Received	10,000	11,200
Total Cash Receipts	526,250	561,850
Total Cash Available	536,250	466,100
Cash Disbursements
Purchases	390,000	390,000
Salaries	150,000	165,000
Operating Expenses	92,000	93,500
Total Cash Disbursements	632,000	648,500
Ending Balance	(95,750)	(182,400)

Cash Deficit is there.

Cash Disbursements for Purchases
	February	March
Cash Purchases	180,000	190,000
Payment for Credit Purchases
Jan purchases	210,000
Feb purchases		200,000
Total cash disbursements for purchases	390,000	390,000

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