Question

QUESTION 3                                                                                                             

Winter Company, a manufacturer of leather bags had the following budgeted information for October 2019: October 1 cash balance R3 500 Expected sales 2 500 units at R25 each (half in cash, remainder on credit due in November) 3. Inventory purchases 3 000 units at R14 each (all in cash)       4. Rent R1 450       5. Payroll R1 000       6. Utilities and other costs R4 500       7. Required Accounts receivable balance Oct. 1, R35000 (includes R700 bad debts allowance; use this amount for both parts1 and 4 : ​ Calculate the following:             What is the budgeted collection on accounts receivables for October? (3)          What are the total cash disbursements for October?                                 (3)          What is the ending cash balance for October?                                           (4)         Assuming sales are collected 75% in the month of sale and 25% the             following month, what is the ending cash balance for October?              (5)

Answer 1

Opening cash balance	3,500
Cash sales	31,250
Opening rec recd	35,700
Total collections	66,950
Cash balance available	70,450
Inventory purchase payment	42,000
Rent	1,450
Payroll	1,000
Utilities & other costs	4,500
Total cash payments	48,950
Ending cash balance	21,500

budgeted collection on accounts receivables for October = 35,700

total cash disbursements for October = 48,950

ending cash balance for October = 21,500

what is the ending cash balance for October (75% & 25%) = 44,938

Existing ending cash balance = 21,500

Add: 75% of current credit sales = 23,438

Ending cash balance = 44,938

Please Like the solution if satisfied with the answer and if any query please mention it in comments...thanks