Amsterdam Sdn. Bhd. has approached its bankers for loan facilities to be made available during the coming quarter. The bank has responded by requesting that a cash budget is prepared before any decision can be taken. The following information has been compiled:

	June RM’000	July RM’000	August RM’000
Sales	150	200	100
Purchases	120	60	40
Wage payments	20	22	15
Hire-purchase payments	15	15	15
Cash expenses	20	30	15
Depreciation	5	5	5
Capital items	13	-	-

Trade receivables on 1 June amount to RM 84,000 of which it is estimated RM 78,000 will be collected during the month and RM 4,000 in July. The balance is to be written off as a bad debt. The expected pattern of cash collection from sales is 25% during the month of sale, 70% in the month following sale and 4% in the next month.

On 1 June, the amount owing to trade payables for purchases was RM 90,000. Purchases and capital items are paid for in the month following the month of supply.

Required:

Prepare a cash budget for each of the months of June, July and August. The opening cash balance at 1 June is RM 20,500.

Answer rating: 100% (QA)

ANSWER Solution Cash Budget For the Month of June July and Augest Descriptio... View the full answer