The following are several information and assumption in preparing the cash budget for Triple ZZZ Company September
Question:
The following are several information and assumption in preparing the cash budget for Triple ZZZ Company September - November 2022. The sales forecast (in RM) is:
MONTH/ MONTH
TOTAL SALES/TOTAL SALES (RM)
CREDIT SALES (RM)
Julai/July
45, 000
33, 750
August
65, 000
48, 750
September /September
60, 000
45, 000
October/October
90, 000
67, 500
November /November
85, 000
63, 750
December
60, 000
45, 000
a) For credit sales, 80% of it will be collected in the next month and 20% will be collected two months after the sales.
b) The purchase of raw material is predicted at 60% of sales and is made in the month of sales.
c) Payment for purchases will be made equally in the two months after purchase.
d)Monthly fixed payments are as follows:
i. Office and warehouse rent RM4,500
Office and warehouse rentals of RM4,500
i. Salary RM5,000
Wages of RM5,000
iii. Premium insurans RM2,800
Insurance premium of RM2,800
e) Dividends amounting to RM10,000 will be received in October
f) The purchase of a new asset involving a cost RM25,000 will be made in the month of September
g) The cost of renovation will be paid RM20,000 in September and RM20,000 in November.
h) Opening cash balance that the company of September is RM15,000.
i) The cash balance that the company intends to hold every month is RM10,000.
j) Interest rate 12% per year will be charged if the company makes a loan.
Prepare a cash budget for Triple ZZZ Company for September – November 2022.
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M