QUESTION 1

Actual and expected sales for Khepri Products are:

ACTUAL
July
August
September
BUDGETED
October
November
December

Sales
$ 26,800.00
$ 25,200.00
$ 24,000.00
$ 26,400.00
$ 26,000.00
$ 27,800.00

- All sales are on credit

- Collections from debtors (accounts receivable) follow a pattern:10% in the month of sale
70% in the month following sale
20% two months after sale
Prepare a schedule of collections from debtors for the three months ending 31 December

Q1 Answer

Schedule of Collections
July
Sales+GST
July
$ 26,800.00
August
$ 25,200.00
September
$ 24,000.00
October
$ 26,400.00
November
$ 26,000.00
December
$ 27,800.00

GST Collected

$ 2,680.00

August
$ 18,760.00
$ 2,520.00

Sept
$ 5,360.00
$ 17,640.00
$ 2,400.00

October

$
$
$

5,040.00
16,800.00
2,640.00

November

$
$
$

4,800.00
18,480.00
2,600.00

December

24,480.00

25,880.00

$
$
$
$

2,448.00

2,588.00

5,280.00
18,200.00
2,780.00
26,260.00
2,626.00

$ 5,200.00
$ 19,460.00

$ 5,560.00

Question 2 - Cash Budgets

Behdety Sports Supplies is preparing its budgets for the quarter ending 31 March
Actual and Estimated Sales (exclusive of GST)
ACTUAL
October
November
December
BUDGET
January
February
March

$
$
$

32,000
35,000
40,000

$
$
$

39,000
43,000
42,000

- Cash sales are 50% of total sales

- Credit sales are normally collected in the following pattern:60% in the month following the sale
30% in the second month following the sale
10% in the third month following the sale
- Other income to be received includes:Rental income
$
1,500 per month
Interest
$
2,100 in February

a) Prepare a debtors collection schedule for three months ending 31 March

b) Prepare the cash receipts portion of a cash budget three months ending 31 March

Q2 Answer

Question 2 - Cash Budgets ANSWER

Cash Sales
Credit Sales
Total Sales

October
50% $
16,000
50% $
16,000
100% $
32,000

November
$
17,500
$
17,500
$
35,000

Month of Sale
December
January
February March
$
20,000 $
19,500 $ 21,500 $ 21,000
$
20,000 $
19,500 $ 21,500 $ 21,000
$
40,000 $
39,000 $ 43,000 $ 42,000

a) Debtors' Collection Schedule

Sales (incl of GST)
October
November
December
January
February
March

Credit Sales
$
16,000
$
17,500
$
20,000
$
19,500
$
21,500
$
21,000

Oct
$

Nov
9,600

$
$

Dec
4,800
10,500

Jan
$ 1,600
$ 5,250
$ 12,000

$ 18,850

b) Cash receipts portion of cash budget

Cash Receipts
Cash Sales
Receipts from debtors
Rental income
Interest

GST Collected

$
$
$
$
$

Jan
19,500
18,850
1,500
39,850

3,985

$
$
$
$
$

Feb
21,500
19,450
1,500
2,100
44,550

$
$
$
$
$

Mar
21,000
20,750
1,500
43,250

$
4,245 $
4,325
Note: no GST on interest

Feb
$ 1,750
$ 6,000
$ 11,700

$ 19,450

Mar

$ 2,000
$ 5,850
$ 12,900
$ 20,750

Apr

$ 1,950
$ 6,450
$ 12,600

2,150.0
6,300.0

2,100.0