Mahsuri is preparing budgets for the second half of Year 2021. The cash forecasts for the...

 

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Mahsuri is preparing budgets for the second half of Year 2021. The cash forecasts for the 6 months of Year 2021 are given below: Sales Cost: Materials Wages Overheads July RM Augus t RM 40,000 48,000 41,000 47,400 Surplus/(deficit) (1,000) 600 ● Septemb October November December RM RM RM er RM 50,000 20,000 24,000 25,000 4,000 4,800 5,000 17,000 18,600 19,000 60,000 30,000 6,000 21,000 49,000 57,000 1,000 3,000 80,000 40,000 8,000 25,000 73,000 7,000 100,000 b. Comment on the cash budget results above. 50,000 10,000 29,000 • 5% cash discount will be allowed for receipts in month of sale. 50% of customers are expected to pay in the month of sale; 30% will take one month's credit, and 20% will take 2 months' credit. 89,000 11,000 • Materials are purchased and used in the month in which goods are sold. Creditors for materials are paid in the following month. • 75% of wages are paid in the month incurred. The remainder (25%) is paid in the following month. • Overheads include a monthly charge of RM2,000 for depreciation. 10% of the creditors for overheads are paid in the same month incurred. The remainder (90%) is paid in the following month. The company is having a new building constructed and the first instalment of RM10,000 will be paid in October. • Sales for the last TWO (2) months of first half year 2021 were: May RM60,000 RM50,000 June • In June 2021 materials purchased were RM25,000. Wages were RM5,000 and overheads were RM16,000 (including RM2,000 depreciation). The expected cash balance at beginning of July 2021 is RM1,250. • Required: a. Prepare the Cash Budget for each of the last 6 months of Year 2021. (16 marks) (4 marks) Mahsuri is preparing budgets for the second half of Year 2021. The cash forecasts for the 6 months of Year 2021 are given below: Sales Cost: Materials Wages Overheads July RM Augus t RM 40,000 48,000 41,000 47,400 Surplus/(deficit) (1,000) 600 ● Septemb October November December RM RM RM er RM 50,000 20,000 24,000 25,000 4,000 4,800 5,000 17,000 18,600 19,000 60,000 30,000 6,000 21,000 49,000 57,000 1,000 3,000 80,000 40,000 8,000 25,000 73,000 7,000 100,000 b. Comment on the cash budget results above. 50,000 10,000 29,000 • 5% cash discount will be allowed for receipts in month of sale. 50% of customers are expected to pay in the month of sale; 30% will take one month's credit, and 20% will take 2 months' credit. 89,000 11,000 • Materials are purchased and used in the month in which goods are sold. Creditors for materials are paid in the following month. • 75% of wages are paid in the month incurred. The remainder (25%) is paid in the following month. • Overheads include a monthly charge of RM2,000 for depreciation. 10% of the creditors for overheads are paid in the same month incurred. The remainder (90%) is paid in the following month. The company is having a new building constructed and the first instalment of RM10,000 will be paid in October. • Sales for the last TWO (2) months of first half year 2021 were: May RM60,000 RM50,000 June • In June 2021 materials purchased were RM25,000. Wages were RM5,000 and overheads were RM16,000 (including RM2,000 depreciation). The expected cash balance at beginning of July 2021 is RM1,250. • Required: a. Prepare the Cash Budget for each of the last 6 months of Year 2021. (16 marks) (4 marks)

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