Reference no: EM133276065

The budgeted transactions of tagwitch Incorporated  for the quarter ending 30 April 2022 are as follows:

i.   Budgeted sales amount to R 1 152 630,98. (38 % will be sold during February 2022, 34 % during March 2022 and the rest during April 2022. 49 % of the sales are expected to be made on credit. Debtors usually pay their debt as follows:

• 46 % in the month following the month of sales
• 28 % in the second month following month of the sales
• 18 % in the third month following the month of the sales
• 8 % is written off as irrecoverable in the last month of collection

ii.   Purchases is expected to amount to R 720 394,00. Assume that opening and closing inventories will remain constant and that a constant mark-up percentage is maintained throughout. 41% of all the purchases are made on credit, while creditors are paid in the month following the month in which the purchases were made.

iii.  Sales personnel receive a commission of 14 % on all sales. Office personnel receive monthly salaries of

R 13 098,00 each. There are 12 office staff members. The commission and salaries are paid in cash every month.

iv.  New office equipment with a hire purchase price of R 230 526,20 will be purchased on 1 February 2022. A deposit of 40 % of the HP price must be paid on 1 February 2022, and the balance must be paid in 55 equal monthly instalments beginning the 1 March 2022. R 8 538,01 depreciation is to be written off per month on this vehicle as from 1 April 2022.

v.  Income tax amounting to R 26 196,00 is payable during April 2022 to SARS.

vi. Dividends of R 19 647,00, declared on 8 January 2022, must be paid during March 2022.

vii. The following balances appeared in the books of Magwitch Incorporated on 31 January 2022:

Bank (favourable)                      R 611 244,00

Debtors                                          R 205 312,00

Creditors                                        R 180 099,00

viii. Credit sales were as follows during the previous budget period:

         November 2021                               R180 099,00

          December 2021                              R 108 059,00

          January 2022                                  R 144 079,00

Prepare tagwitch Incorporated  monthly cash budget for February, March and April 2022

Cash budget for .............

	2022	2022	2022
	February	March	April
Opening Cash Balance
Estimated receipts:
Total cash available
Estimated cash outflows
Closing cash balance