The following information was made available by Nabeem Fashions for the three mo
ID: 2819166 • Letter: T
Question
The following information was made available by Nabeem Fashions for the three months ending 31 March 2018.
Details
January
February
March
Rand
Rand
Rand
Sales
460 000
490 000
520 000
Purchases
50 000
80 000
100 000
Rent income
22 000
Salaries
35 600
Additional information:
60% of the sales are for cash and the balance is on credit. Collection from debtors is as follows:
*30% in the month of sale
*70% in the month after the sale.
2. All purchases are on credit and are paid one month after the purchases less 2% discount.
3. Rent income will increase by 10% on 1 March 2018.
4. Salaries will increase by R 5 400.00 in February 2018.
5. Advertising in the daily newspapers amounts to 15% of the months’ sale and is paid in the month following the advertisement.
6. A fixed deposit of R 75 000.00 matures on 28 February 2018. Interest of R 5 000.00 will also be received on this date.
7. A loan repayment of R 40 000.00 will be made on 31 March 2018 to Rundry Loan Company.
8. A favourable cash balance of R 75 000.00 is expected to be on hand on 1 February 2018.
Required
Prepare a Debtors collection schedule for February and March 2018
Details
January
February
March
Rand
Rand
Rand
Sales
460 000
490 000
520 000
Purchases
50 000
80 000
100 000
Rent income
22 000
Salaries
35 600
Explanation / Answer
Debtors collection schedule for February and March 2018
February
March
Total
Collection of 30% in the month of sale
$58800
$62400
$121200
Collection of 70% in the month after the sale.
$128800
$137200
$266000
Total
$187600
$199600
$387200
Working Note;
1. 30% collected in the month of February will be calculated as follow;
($490000 * 0.40 * 0.30) = $58800
2. 30% collected in the month of March will be calculated as follow;
($520000 * 0.40 * 0.30) = $62400
3. 70% collected in the month after sale in February will be calculated as follow;
($460000 * 0.40 * 0.70) = $128800
4. 70% collected in the month after sale in March will be calculated as follow;
($490000 * 0.40 * 0.70) = $137200
Debtors collection schedule for February and March 2018
February
March
Total
Collection of 30% in the month of sale
$58800
$62400
$121200
Collection of 70% in the month after the sale.
$128800
$137200
$266000
Total
$187600
$199600
$387200
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