1. 2. 3. 4. 5. 6. 7. Actual sales in January and February 2021 are RM108,000...

 

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1. 2. 3. 4. 5. 6. 7. Actual sales in January and February 2021 are RM108,000 and RM128,000 respectively, while sales in March and April 2021 are forecasted to be RM130,000 and RM 90,000 respectively. 20% of the sales are paid in the month in which they are incurred and customers are rewarded with a 10% cash discount. The remaining credit sales are settled in the following manner: 70% in the month following the month of sales, and 25% in the second month following the month of sales. The balance is written off as bad debts. The company's gross profit margin is 40%. Purchases are made two months prior to sales and one month credit is taken from suppliers. The company has ordered a machine costing RM62,900 which will be fully paid in cash on 6th March 2021. Assume that Steady Bhd. will receive a cheque of RM40,000 on 19th March 2021, the cheque will be deposited into the cheque deposit machine immediately and bounced two days later. A term loan amounting to RM80,000 will be fully repaid at the end of February 2021. The monthly interest of the loan is RM8,000 and will be charged at the end of each month. The overdraft balance on 28th February 2021 is RM20,000. Interest of 10% will be charged based on the closing balance at the end of each month and paid in the following month. Required: (i) Prepare a cash budget for Steady Bhd. for the month of March 2021. marks) (6 (ii) Comment on the cash budget prepared in part (i) above. (4 marks) 1. 2. 3. 4. 5. 6. 7. Actual sales in January and February 2021 are RM108,000 and RM128,000 respectively, while sales in March and April 2021 are forecasted to be RM130,000 and RM 90,000 respectively. 20% of the sales are paid in the month in which they are incurred and customers are rewarded with a 10% cash discount. The remaining credit sales are settled in the following manner: 70% in the month following the month of sales, and 25% in the second month following the month of sales. The balance is written off as bad debts. The company's gross profit margin is 40%. Purchases are made two months prior to sales and one month credit is taken from suppliers. The company has ordered a machine costing RM62,900 which will be fully paid in cash on 6th March 2021. Assume that Steady Bhd. will receive a cheque of RM40,000 on 19th March 2021, the cheque will be deposited into the cheque deposit machine immediately and bounced two days later. A term loan amounting to RM80,000 will be fully repaid at the end of February 2021. The monthly interest of the loan is RM8,000 and will be charged at the end of each month. The overdraft balance on 28th February 2021 is RM20,000. Interest of 10% will be charged based on the closing balance at the end of each month and paid in the following month. Required: (i) Prepare a cash budget for Steady Bhd. for the month of March 2021. marks) (6 (ii) Comment on the cash budget prepared in part (i) above. (4 marks)

Answer rating: 100% (QA)

Cash Budget for Steady Bhd for March 2021 ParticularsJanFebMarApr Sales Jan sales108000 Feb sales 12... View the full answer