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Ilona Ltd is preparing its cash budget for May. The following information is available regarding the...

Ilona Ltd is preparing its cash budget for May. The following information is available regarding the monthly collection history of the company:

Current month’s sales collections

30%

Prior month’s sales collections

58%

2 months’ prior sales collections

6%

3 months’ prior sales collections

4%

The remaining 2% is not collected and the company writes it off as bad debt. Credit sales to date are as follows:

February

R410 000

March

R295 000

April

R385 000

May

R400 000

The total cash disbursements for the month of May amounts to R420 000 and the cash balance on 1 May was R10 000.

REQUIRED

Calculate the cash balance on 31 May.Show all calculations clearly.

Comment on the cash flow positions on 31 May.             

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Expert Solution

ekkarill92 answered 1 year ago
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