Perdana Sdn Bhd needs a cash budget for the month of April 2014. The company's controller...
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Perdana Sdn Bhd needs a cash budget for the month of April 2014. The company's controller has provided you with the following information and assumptions: 1. The 1 April 2014 cash balance is expected to be RM11,000. 2. All sales are on account. Credit sales are collected over a 3-month period, 50% in the month of sale, 35% in the month following sale and 15% in the second month following sale. Actual sales for February and March were RM100,000 and RM90,000, respectively. April's sales are budgeted at RM110,000. 3. Marketable securities are expected to be sold for RM25,000 during the month of April. 4. The controller estimates that direct materials totalling RM44,000 will be purchased during April. Sixty percent of a month's raw materials purchases are paid in the month of purchase with the remaining 40% paid in the following month. Accounts payable for March purchases totalled RM9,000, which will be paid in April. 5. During April, direct labour costs are estimated to be RM19,000. 6. Manufacturing overhead is estimated to be 40% of direct labour costs. Further, the controller estimates that approximately 10% of the manufacturing overhead is depreciation on the factory building and equipment. 7. Selling and administrative expenses are budgeted at RM22,000 for April. Of this amount, RM7,000 is for depreciation. 8. During April, Perdana Sdn Bhd plans to buy a new delivery van costing RM25,000. The company will pay cash for the van. 9. Perdana Sdn Bhd owes RM35,000 in income tax, which must be paid in April. 10. Perdana Sdn Bhd must maintain a minimum cash balance of RM10,000. To bolster the cash position as needed, an open line of credit is available from the company's bank. Required: Prepare the following: a. A schedule of cash collections for April. b. A schedule of cash payments for raw materials purchases for April. C. A cash budget for the month of April. Indicate in the financing section any borrowing that will be necessary during the month. Perdana Sdn Bhd needs a cash budget for the month of April 2014. The company's controller has provided you with the following information and assumptions: 1. The 1 April 2014 cash balance is expected to be RM11,000. 2. All sales are on account. Credit sales are collected over a 3-month period, 50% in the month of sale, 35% in the month following sale and 15% in the second month following sale. Actual sales for February and March were RM100,000 and RM90,000, respectively. April's sales are budgeted at RM110,000. 3. Marketable securities are expected to be sold for RM25,000 during the month of April. 4. The controller estimates that direct materials totalling RM44,000 will be purchased during April. Sixty percent of a month's raw materials purchases are paid in the month of purchase with the remaining 40% paid in the following month. Accounts payable for March purchases totalled RM9,000, which will be paid in April. 5. During April, direct labour costs are estimated to be RM19,000. 6. Manufacturing overhead is estimated to be 40% of direct labour costs. Further, the controller estimates that approximately 10% of the manufacturing overhead is depreciation on the factory building and equipment. 7. Selling and administrative expenses are budgeted at RM22,000 for April. Of this amount, RM7,000 is for depreciation. 8. During April, Perdana Sdn Bhd plans to buy a new delivery van costing RM25,000. The company will pay cash for the van. 9. Perdana Sdn Bhd owes RM35,000 in income tax, which must be paid in April. 10. Perdana Sdn Bhd must maintain a minimum cash balance of RM10,000. To bolster the cash position as needed, an open line of credit is available from the company's bank. Required: Prepare the following: a. A schedule of cash collections for April. b. A schedule of cash payments for raw materials purchases for April. C. A cash budget for the month of April. Indicate in the financing section any borrowing that will be necessary during the month.
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Here are the schedules and cash budget for Perdana Sdn Bhd for April 2014 a Schedule of Cash Collect... View the full answer
Related Book For
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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