Reference no: EM132895845

Below is a summary of the past and expected future sales (all values in R):

B Ltd. has given you the following information to prepare its cash budget for December 20XX.

October             November            December

R80 000              R70 000             R100 000

• 50% of sales are on credit.
• 40% of credit sales are collected in the month of sale and the remainder in the month thereafter.
• Purchases amount to 60% of sales.
• All purchases are on credit.
• 50% of purchases are paid in the first month following the month of purchase and the remainder is settled in the second month after the month of purchase.

Problem 1: What amount of purchases would be paid in December?

A. R60 000

B. R24 000

C. R21 000

D. R45 000