Question 2 (SO1, AC1) Pierre Blanc has been trading for some years as a retailer of cheese. His bank account is expected to have an overdrawn balance of R3,100 at 31 March 2012, and Pierre needs to show his bank manager that this can be reduced over the following 3 months. The details of his expenditure are as follows: 1. Sales, which are all made for cash, are expected to be as follows: R April 2012 4,100 May 2012 5,200 June 2012 6,000 2. Purchases will be made as follows: R April 2012 2,050 May 2012 2,100 June 2012 3,500 Suppliers allow 2 months’ credit. 3. Rent of R5,400 per annum is payable monthly. 4. Pierre employs a part-time member of staff who is paid R300 per month. 5. Pierre plans to make drawings of R500 per month. 6. Other expenses will be paid as follows: R April 2012 150 May 2012 200 June 2012 350 7. Sales and purchases made in January to March were as follows: Sales R Purchases R January 2012 3,600 1,700 February 2012 3,700 1,800 March 2012 3,800 1,900
REQUIRED:
a) Prepare Pierre’s cash budget for the 3 months ended 30 June 2012. [10]
b) How much will Pierre owe for trade payables at 30 June 2012? [3]
Question 1 (SO3, AC1) My after-tax income from my small business is greatly reduced by the incomes taxes I pay each year. A friend of mine told me I could reduce the amount of taxes I owe by shifting my income elsewhere. Is that true?