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QUESTION 3: BUDGETING The information relates to JR Sanitisers (Pty) Ltd - NSC Accounting - Question 3 - 2022 - Paper 2
Question 3
QUESTION 3: BUDGETING The information relates to JR Sanitisers (Pty) Ltd. The CEO is Juanita Rose. James Peter is the bookkeeper. REQUIRED: 3.1 Complete the... show full transcript
Worked Solution & Example Answer:QUESTION 3: BUDGETING The information relates to JR Sanitisers (Pty) Ltd - NSC Accounting - Question 3 - 2022 - Paper 2
Step 1
3.1 Complete the Creditors' Payment Schedule for December 2022.
Answer
To complete the Creditors' Payment Schedule for December 2022, we need to consider the purchases made in prior months and their corresponding payments.
The December payments can be calculated as follows:
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For October purchases:
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For November purchases:
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For December purchases (which should total $66,300).
Thus, the total creditors' payments for December are:
This table should reflect these calculations clearly.
Step 2
3.2 Calculate missing figures (i) to (iii) in the Cash Budget.
Answer
To find the missing figures in the Cash Budget for December 2022:
(i) Collection from debtors
Using the collection formula given:
- If total debtors are , the amount collected is:
(ii) Rent income
Given the formula:
(iii) Salaries
The calculation for salaries shows:
- Total Salary expenditure can thus be given by: 39,000 - 1,755$.
Hence, by substituting into the budget, we derive the correct total budgeted allocations.
Step 3
3.3.1 Calculate the deposit that will be paid for the purchase of the company vehicle during December 2022.
Answer
To calculate the deposit for the company vehicle:
Given the formula provided in the marking scheme, we use:
deposit = (20,800 + 24 ext{percent}) imes { ext{price of vehicle}}.
Thus, the deposit would be: This is calculated by substituting in the relevant figures as described.
Step 4
3.3.2 Use the table in the ANSWER BOOK to show the effect of this proposal to the December 2022 Cash Budget.
Answer
To show the effect, we would adjust the cash budget to reflect that the car purchase is being postponed.
- Budgeted deficit after proposal
- New deposit affects calculations leading to a modified cash flow diagram for December 2022.
Step 5
3.4 Provide TWO points regarding advertising decisions.
Answer
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Under-spended on advertising leading to potential sales loss. Actual amount spent was R120,000, less than the budget which could affect revenue.
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Lack of follow-up analysis on advertising effectiveness indicated possible mismanagement in future budgeting.
Step 6
3.5.1 Explain why Juanita should be concerned about maintenance spending.
Answer
Juanita should be concerned due to potential operational disruptions if maintenance is not performed adequately. Comparing the budget of R30,000 with actual expenditure of R22,000 indicates underfunding that could lead to future liabilities or added costs in repairs.
Step 7
3.5.2 Explain why James' opinion on expenses is correct or not.
Answer
James' opinion is accurate if comparing against set benchmarks. The calculated delivery expenses exceeding the budget highlight a lack of control over spending. Corrective measures should be taken to evaluate delivery efficiency.
Step 8