- 10 Marks
ICMA – Nov 2024 – L1 – Q2a – Cash Collection and Payment
Calculates cash collected from debtors and payments made to creditors.
Question
Cash Collected from Debtors and Payments to Creditors
The following balances have been extracted from the Statement of Financial Position of Zena LTD as at 31 December 2023:
| Account | Amount (GH¢) |
|---|---|
| Debtors | 55,000 |
| Creditors | 60,000 |
Additional information from the 2024 budget:
- Sales are GH¢250,000 out of which 25% is cash. The sales are evenly distributed and the business gives one-month credit to its customers.
- Total purchases of GH¢180,000, evenly distributed, are all on credit. Suppliers allow two months’ credit.
Required:
i) The cash to be collected from debtors during the year.
ii) The cash to be paid during the year.
Find Related Questions by Tags, levels, etc.
- Tags: Budgeting, Cash Collection, Creditors, Debtors
- Level: Level 1
- Topic: Cash Budgeting and Working Capital
- Series: Nov 2024
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