3.1 Refer to Information B. Identify: - TWO items that were incorrectly recorded in the Cash Budget. - TWO items in the Cash Budget that would NOT appear in a Projected Statement of Comprehensive Income. 3.2 Complete the Debtors' Collection Schedule for December 2023. 3.3 Refer to Information A and B. Calculate the amounts indicated by (i) to (iv). 3.4 Refer to Information G (budgeted and actual figures). 3.4.1 In order to increase sales, Adam decided to change the way in which the salespeople are paid each month from 1 November 2023. The salespeople agreed to the change. - Explain the changes that Adam made. - Explain why some of the salespeople regretted their decision to agree to these changes. Quote figures or show calculations. - Adam feels that the decision has benefitted the company, while the sales manager, Milly, is concerned it did not benefit the company. Provide ONE point (with figures or calculations) to support EACH of these opinions. 3.4.2 Adam is concerned about the escalating rent expenses and plans to purchase the property. - Calculate the net effect of this purchase on the receipts and payments in the Cash Budget. - Give ONE reason why Adam has decided to go ahead with this purchase.

NSC Accounting Debtors’ collection schedule: 3.1 Refer to Information B. Ide

3.1 Refer to Information B - NSC Accounting - Question 3 - 2023 - Paper 2

Question 3

3.1 Refer to Information B. Identify: - TWO items that were incorrectly recorded in the Cash Budget. - TWO items in the Cash Budget that would NOT appear in a Pro... show full transcript

Worked Solution & Example Answer:3.1 Refer to Information B - NSC Accounting - Question 3 - 2023 - Paper 2

Step 1

Identify: TWO items that were incorrectly recorded in the Cash Budget.

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Answer

Discount received
Bad debts

Step 2

Identify: TWO items in the Cash Budget that would NOT appear in a Projected Statement of Comprehensive Income.

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Answer

Cash from debtors
Payment to creditors

Step 3

Complete the Debtors' Collection Schedule for December 2023.

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Answer

MONTHS	CREDIT SALES	CASH FROM DEBTORS
SEPTEMBER	535 500	42 840
OCTOBER	320 000	51 240
NOVEMBER	651 000	247 380
DECEMBER	682 500	259 950

Step 4

Calculate the discount allowed in November 2023.

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Answer

For November, discount allowed is calculated as:

ext{Total sales} = 651000 imes 0.05 = 32 550

Thus, the discount allowed is R13 020.

Step 5

Calculate the interest on savings account in December 2023.

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Answer

The interest on savings is calculated as:

ext{Interest} = 84000 imes rac{4}{100} imes rac{1}{12} = 1 480 $$.

Step 6

Calculate the payments to creditors in December 2023.

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Answer

Payments to creditors is:

ext{Payments} = 610 470 $$.

Step 7

Calculate the rent expenses for November 2023.

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Answer

Rent expenses are calculated as:

ext{Rent expenses} = 31 640 imes rac{100}{113} = 28 000 $$.

Step 8

Explain the changes that Adam made.

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Answer

Adam introduced a commission system for sales staff and reduced the fixed salary cap from R165 000 to R161 050, which they agreed.

Step 9

Explain why some of the salespeople regretted their decision to agree to these changes.

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Answer

The salespeople felt that the reduced fixed salary could lead to lower total earnings compared to previous months, especially if sales dropped.

Step 10

Provide ONE point to support Adam's opinion.

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Answer

Total sales were above the budgeted amount by 33.3% as more customers were attracted. Profit exceeded the budget by R139 500.

Step 11

Provide ONE point to support Milly's opinion.

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Answer

Profit margins decreased significantly and customers complained about delayed deliveries, leading to potential loss of sales.

Step 12

Calculate the net effect of the property purchase on receipts and payments in the Cash Budget.

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Answer

Net effect calculated as:

ext{Net effect} = (1 000 000 + 150 000 + 350 000 + 500 000 + 720 000) - (750 000) $$.

Step 13

Give ONE reason why Adam has decided to go ahead with this purchase.

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Answer

Adam sees the purchase as a long-term investment for stability, which can enhance savings on rental expenses.

3.1 Refer to Information B - NSC Accounting - Question 3 - 2023 - Paper 2

Worked Solution & Example Answer:3.1 Refer to Information B - NSC Accounting - Question 3 - 2023 - Paper 2

Identify: TWO items that were incorrectly recorded in the Cash Budget.

Identify: TWO items in the Cash Budget that would NOT appear in a Projected Statement of Comprehensive Income.

Complete the Debtors' Collection Schedule for December 2023.

Calculate the discount allowed in November 2023.

Calculate the interest on savings account in December 2023.

Calculate the payments to creditors in December 2023.

Calculate the rent expenses for November 2023.

Explain the changes that Adam made.

Explain why some of the salespeople regretted their decision to agree to these changes.

Provide ONE point to support Adam's opinion.

Provide ONE point to support Milly's opinion.

Calculate the net effect of the property purchase on receipts and payments in the Cash Budget.

Give ONE reason why Adam has decided to go ahead with this purchase.

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