INFORMATION The following information was provided by Intel Enterprises: 1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable). 2. Credit sales are expected to be as follows: December 2022 January 2023 February 2023 R576 000 R540 000 R648 000 3. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customers receive a 10% discount. 4. Credit sales are normally collected as follows: * 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount. * 65% in the following month The rest is usually written off as bad debts. 5. Budgeted purchases of inventory are as follows: December 2022 January 2023 February 2023 R1 000 000 R800 000 R920 000 6. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase. 7. The monthly salaries amount to R150 000. Salaries are expected to increase by 9% with effect from 01 February 2023 for those employees who presently make up 80% of the salary bill. The salaries of the remaining 20% are expected to increase by 6%. 8. Interest at 18% per annum on the loan balance is paid at the end of each month. The loan balance on 31 December 2022 was R400 000 and a capital repayment of R100 000 will be made on 01 February 2023. 9. Part of the building is sublet to a tenant and rent is collected monthly. The lease agreement for the year ended 31 January 2023 reflected the rental as R180 000 per annum. The rental will increase by 10% with effect from 01 February 2023. 10. Other operating expenses are budgeted at R40 000 per month. This amount includes R5 000 for depreciation. Operating expenses are paid for in the month in which they are incurred Use the information provided above to prepare cash budget for January and February 2023

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

INFORMATION
The following information was provided by Intel Enterprises:
1. The bank balance on 31 December 2022 is expected to be R40 000 (unfavourable).
2. Credit sales are expected to be as follows:
December 2022    January 2023       February 2023
R576 000              R540 000             R648 000
3. Credit sales usually make up 40% of the total sales. Cash sales make up the balance. Cash customers
receive a 10% discount.
4. Credit sales are normally collected as follows:
* 30% in the month in which the transaction takes place, and these customers are entitled to a 5% discount.
* 65% in the following month
The rest is usually written off as bad debts.
5. Budgeted purchases of inventory are as follows:
December 2022     January 2023    February 2023
R1 000 000            R800 000            R920 000
6. Fifty percent (50%) of the purchases are for cash. The remainder is paid in the month after the purchase.
7. The monthly salaries amount to R150 000. Salaries are expected to increase by 9% with effect from 01
February 2023 for those employees who presently make up 80% of the salary bill. The salaries of the
remaining 20% are expected to increase by 6%.
8. Interest at 18% per annum on the loan balance is paid at the end of each month. The loan balance on 31
December 2022 was R400 000 and a capital repayment of R100 000 will be made on 01 February 2023.
9. Part of the building is sublet to a tenant and rent is collected monthly. The lease agreement for the year
ended 31 January 2023 reflected the rental as R180 000 per annum. The rental will increase by 10% with
effect from 01 February 2023.
10. Other operating expenses are budgeted at R40 000 per month. This amount includes R5 000 for
depreciation. Operating expenses are paid for in the month in which they are incurred

Use the information provided above to prepare cash budget for January and February 2023

Expert Solution
steps

Step by step

Solved in 2 steps with 4 images

Blurred answer
Knowledge Booster
Receivables Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education