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Thank you 4. The current mark-up is 60% on cost. 5. A fixed base stock of raw materials is kept at all times. All raw materials are bought on credit. Creditors are paid in the month following the purchase of stock (i.e. within 30 days) to earn a 10% discount. 6. At the end of the financial year ended 28 February 2021, the return on total capital employed was 5%. Mbatha LTD Cash Budget for the six period January to June 2021 May June March April Receipts Jan Feb 132 000 148 800 192 000 Cash sales 129 600 138 400 144 000 ? ? 2 ? Collection from debtors 188 700 194 370 0 0 0 Issue of shares 1 300 000 0 0 0 80 000 Sale of Factory Equip 0 0 0 0 ? ? Total Receipts 1 618 300 332 770 ? ? PAYMENTS Payments to creditors 201 563 182 250 A 185 625 B Salary of Factory Manager 20 000 20 000 20 000 20 000 20 800 20 800 Wages for 20 Direct Labourers 150 000 150 000 150 000 150 000 161 250 161 250 Directors Fees 66 000 66 000 66 000 66 000 66 000 66 000 Interest on loan (8% p.a.) 5 600 5 600 4 200 4 200 4 200 2 700 Repayment of loan 0 0 D 0 0 E Repurchase of Shares 0 0 0 ? 0 O Interim dividends paid 0 0 0 0 0 F Maintenance of Factory Equip 12 000 12 000 12 000 12 000 2000 2 000 Electricity (80% for factory) 8 000 8 000 8 000 8 000 6 500 6 500 Deposit on new Factory Equip 0 0 0 150 000 0 Instalments on new factory Equip (incl finance charges) 0 0 0 0 0 16 000 Independent auditors fees 0 0 0 60 000 0 0 Independent auditors fees 0 0 O 60 000 lo 0 Total Payments ? ? ? ? ? ? Cash Surplus / Deficit ? ? ? ? ? ? Cash Balance at the beginning of the period ? ? ? ? ? ? Cash Balance at the end of the period ? ? ? ? ? ? (2) 4 Identify TWO ways in which a business can decrease the amount of bad debts that are written off. . (12) 5 Calculate the amounts for payments to creditors labelled A to C on the Cash Budget. Show calculations so part marks can be awarded. A B C 6 Consider the loan and interest payable on the loan: 6.1 Calculate the amounts labelled D and E showing the repayments of the loan. (4) D E 6.2 Calculate the amount owed on the loan at the end of June. (2) 6.3 Identify ONE reason, quoting relevant amounts, to explain why this business made such a concerted effort to reduce their loans. (3) 7 Consider the shares and dividends. 7.1 Calculate the number of new shares that will be issued in January 2021. (2) 7.2 (8) One of the current shareholder has requested that the business rep hase his shares in April 2021. The business has agreed to this request. Complete the table below to show how this repurchase will be treated by the business: Account DR Account CR Amount (2) 7.3 Calculate the amount that is budgeted for Interim Dividends (labelled F)

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