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QUESTION $5-$ CASH BUDGET $(35$ marks$)$

Moeketsi Molokomme $($Pty$)$ Ltd is a retail distributor of automotive parts in Gauteng. The

Finance Director has prepared sales budgets for the six months from July to December $2023.$

These are presented below:

Additional information:

Collections from accounts receivable are as follows:

$50\%$ in the month of sale and is subject to a $2\%$ settlement discount

$30\%$ one month after the month of sale

$15\%$ two months after the month of sale and the remainder is uncollectible.

Moeketsi Molokomme $($Pty$)$ Ltd$\text{'}$s inventory requirements are equal to $30\%$ of the next month's

total budgeted sales amount. $($Inventory is purchased in the month preceding its expected

sale.$).$ The suppliers' terms of payment require that $45\%$ be paid in the month of purchase and

the balance is payable in the month after the month of purchase. All purchases are on credit.

January $2024$ sales are expected to comprise credit and cash sales of R$1160000$ and R$80$

$000$ respectively. Moeketsi Molokomme $($Pty$)$ Ltd$.$ Is expected to have a bank overdraft of R$100$

$000$ on $31$ October $2023.$ Thebank overdraft is as result of a dividend payment to be made in

October $2023.$

Selling and administrative costs amount to $50\%$ of the monthly total sales and includes

depreciation of R$40000$ per month.

REQUIRED

Prepare a cash budget for Moeketsi Molokomme $($Pty$)$ Ltd$.$ by month for November and

December $2023.$

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