Sure! Let's go through the steps to complete the debtors' collection schedule and calculate the bad debts.
### Information Given:
- Sales Figures:
- May: R350,000
- June: R400,000
- July: R500,000
- August: [tex]\( 0.75 \times R500,000 = 375,000 \)[/tex] (75% of July's sales)
- September: R800,000
- Payment Trend:
- 50% of credit sales are collected in the month following the sale.
- 48% of credit sales are collected in the second month following the sale.
- 2% of credit sales are written off as bad debts in the third month.
### Step-by-Step Solution:
1.1 Completing the Debtors' Collection Schedule
#### Collections for August (R):
- From July Sales (500,000):
- 50% collected in August: [tex]\( 0.50 \times 500,000 = 250,000 \)[/tex]
- From June Sales (400,000):
- 48% collected in August: [tex]\( 0.48 \times 400,000 = 192,000 \)[/tex]
- From May Sales (350,000):
- 2% written off, taken as collections: [tex]\( 0.02 \times 350,000 = 7,000 \)[/tex]
- Total Collections for August:
- [tex]\( 250,000 + 192,000 + 7,000 = 449,000 \)[/tex]
#### Collections for September (R):
- From August Sales (375,000):
- 50% collected in September: [tex]\( 0.50 \times 375,000 = 187,500 \)[/tex]
- From July Sales (500,000):
- 48% collected in September: [tex]\( 0.48 \times 500,000 = 240,000 \)[/tex]
- From June Sales (400,000):
- 2% from June is written off in September: [tex]\( 0.02 \times 400,000 = 8,000 \)[/tex]
- Total Collections for September:
- [tex]\( 187,500 + 240,000 + 8,000 = 435,500 \)[/tex]
1.2 Calculating Bad Debts for September 2021:
- 2% of July Sales (500,000):
- Bad debts written off: [tex]\( 0.02 \times 500,000 = 10,000 \)[/tex]
### Summary of results:
- Sales for August: R375,000
- Collections for August: R449,000
- Collections for September: R435,500
- Bad Debts for September: R10,000
By following these detailed steps, we have successfully completed the debtors' collection schedule and calculated the bad debts for September 2021.
