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    Tutorial Chapter 4

    Uploaded by

    Rubiatul Adawiah Zainal Ariffin

    Copyright:

    © All Rights Reserved
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    Tutorial Chapter 4

    Uploaded by

    Rubiatul Adawiah Zainal Ariffin
    12 views2 pages

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    12 views2 pages

    Tutorial Chapter 4

    Uploaded by

    Rubiatul Adawiah Zainal Ariffin

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    TUTORIAL CHAPTER 4

    Question 3 (Cash Budget)

    Ali Sdn Bhd., a t-shirt supplier in Malim, Melaka had RM60,000 sales in March and April 2019.
    The company predicts that the sales to be consistently increasing by RM15,000 thereafter.

    Normally the customer would pay 70 percent of the sales in the same month of purchase and pay
    the balance equally within one and two months after the sales. As usual, the company is
    expecting to receive an interest income of RM 2,500 monthly.

    Ali Sdn Bhd. usually, purchase its material 60 percent of the sales one month in advance.
    According to the payment policy, the company would only pay 50 percent of the purchases in the
    same month of purchase and pay the balance one month after the purchase.

    Monthly administrative expenses, rental payments and wages of the company are RM7,000,
    RM2,000, and RM8,000 respectively.

    The fixed assets' depreciation is RM5,000 monthly. The company also plans to add a new set of
    equipment at the end of the second quarter of 2019 which costs the company RM30,000. An
    annual tax rate of RM32,000 is to be paid beginning of each quarter. The ending balance for
    March is RM20,000 and the minimum requirement is RM15,000.

    As the finance manager of the firm, prepare a second-quarter cash budget of 2019 for Ali Sdn
    Bhd. You are required to determine the excess or shortages incurred by the company.

    Question 4 (Cash Budget)

    The forecasted sales of Empire Sdn Bhd for the first and second quarter of 2019 are as follows:

    Month Forecasted Sales (RM)


    January 2,300,000
    February 2,400,000
    March 2,500,000
    April 2,600,000
    May 2,800,000
    June 2,900,000
    July 3,000,000

    a) The company makes 25 percent cash sales, 40 percent is collected in the following
    month. and 35 percent is collected in the second month following sales, whereas 25
    percent is bad debt.

    b) Purchases are 50 percent of sales and are made one month before the sales occur.
    Payment is made equally in the two months after purchases.
    c) The company pays RM25, 000 each month for wages and RM20, 000 each month for
    rent.

    d) Tax repayment of RM30, 000 is made at the beginning of each quarter.

    e) Selling expenses are RM35, 000 per month.

    f) Interest on a term loan of RM 10,000 is payable at the beginning of every quarter.

    g) The company buys a new machine at RM RM40,000 in May and the monthly
    depreciation is RM500.

    h) Ending balance for March is RM 80,000 and a minimum of RM25, 000 must be
    maintained at all times.

    Prepare a cash budget for Empire Sdn Bhd for the second quarter of 2019.

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