Use the following information provided by BCCI Enterprises to prepare the following for November and December 2019:

2.1 Debtors Collection Schedule (6 marks)

2.2 Cash Budget. (14 marks)

Note: Where applicable, round off amounts to the nearest Rand.

INFORMATION 1. BCCI Enterprises expects to have a bank overdraft of R35 000 on 31 October 2019.

2. Budgeted sales for September to December 2019 are as follows:

September October November December R370 000 R280 000 R260 000 R270 000

3. Credit sales account for 70% of total sales. The balance of the sales is for cash.

4. Amounts owing by debtors are usually collected as follows:

20% is collected in the same month as the credit sales;

60% is collected one month after the sale;

15% is collected two months after the sale.

5% is written off as irrecoverable.

5. Sixty percent (60%) of the goods purchased are for cash and the balance is purchased on credit. Budgeted purchases are as follows:

October November December R190 000 R180 000 R200 000

Creditors are paid in the month after the purchase.

6. The monthly salary expense of R105 000 is expected to increase by 10% from 01 December 2019.

7. Interest on loan is paid monthly at an interest rate of 18% per annum on the loan balance of R120 000.

8. Advertising expenses are paid monthly and are estimated to be 5% of the total sales of the previous month.

9. The proprietor drawings for November and December 2019 are expected to total R15 000. R3 000 of this amount consists of trading goods and the rest is cash.

10. Other cash operating expenses are expected to increase by 5% per month. Cash operating expenses for October 2019 are expected to amount to R10 000.