You are provided with information relating to Kobus Hardware, owned by Kobus Groenewald - NSC Accounting - Question 6 - 2016 - Paper 1

To complete the schedule, consider:

• Credit Sales for April:

  $R80 000$

• Collections for March:

  $R68 400 (R76 000 - R8,600)$

• Collections for February:

  $R76,716 (R80 000 \times 45\% \times 95\%)$

Filling in these values will give a complete representation of the financial position.

The percentage increase can be calculated using:

$\text{Percentage Increase} = \frac{(R89 790 - R87 600)}{R87 600} \times 100\%$

Thus:

• Calculation yields:

  $\frac{R2 190}{R87 600} \times 100\% = 2.5\%$

• Overdraft in March: R75 300 is above the overdraft limit of R40 000, highlighting a risk of unsustainable debt.
• Acquisition of new equipment: The plan to acquire a loan of R180 000 in April 2016 increases financial strain.

• Collection from debtors:

  • Collections are below expectations, resulting in cash flow issues.
  • Increasing late payments disrupts operational stability.

• Payments to creditors:

  • Suppliers may cease to provide goods or services due to delayed payments.
  • This could lead to higher costs as alternative suppliers may charge more.

• Insurance:

  • The policy may lapse, leaving the business vulnerable.
  • Increased premiums may arise if the coverage is renewed late.

• Drawings:

  • Excessive personal withdrawals strain business finances.
  • This creates a risk of insufficient funds required for operations.