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    Cash Budget Excercise: Month Sales (RM 000) Actual Sales

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    Khairi Izuan
    The cash budget for Bidara Sdn Bhd for the third quarter of 2019 is: 1) Projected cash receipts total RM403,000, RM377,000, and RM393,000 for July, August, and September respectively from cash sales, credit sales collections, and a dividend received. 2) Projected cash disbursements include purchases, salaries, bonuses, expenses, and machinery purchase, totaling RM209,800, RM286,200, and RM198,500 for the three months. 3) The net cash flows are RM193,200, RM90,800, and RM194,500, leaving ending cash balances of RM243,200, RM

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    Cash Budget Excercise: Month Sales (RM 000) Actual Sales

    Uploaded by

    Khairi Izuan
    910 views4 pages
    The cash budget for Bidara Sdn Bhd for the third quarter of 2019 is: 1) Projected cash receipts total RM403,000, RM377,000, and RM393,000 for July, August, and September respectively from cash sales, credit sales collections, and a dividend received. 2) Projected cash disbursements include purchases, salaries, bonuses, expenses, and machinery purchase, totaling RM209,800, RM286,200, and RM198,500 for the three months. 3) The net cash flows are RM193,200, RM90,800, and RM194,500, leaving ending cash balances of RM243,200, RM

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    Cash budget Dec2018

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    The cash budget for Bidara Sdn Bhd for the third quarter of 2019 is: 1) Projected cash receipts total RM403,000, RM377,000, and RM393,000 for July, August, and September respectively from cash sales, credit sales collections, and a dividend received. 2) Projected cash disbursements include purchases, salaries, bonuses, expenses, and machinery purchase, totaling RM209,800, RM286,200, and RM198,500 for the three months. 3) The net cash flows are RM193,200, RM90,800, and RM194,500, leaving ending cash balances of RM243,200, RM

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    910 views4 pages

    Cash Budget Excercise: Month Sales (RM 000) Actual Sales

    Uploaded by

    Khairi Izuan
    The cash budget for Bidara Sdn Bhd for the third quarter of 2019 is: 1) Projected cash receipts total RM403,000, RM377,000, and RM393,000 for July, August, and September respectively from cash sales, credit sales collections, and a dividend received. 2) Projected cash disbursements include purchases, salaries, bonuses, expenses, and machinery purchase, totaling RM209,800, RM286,200, and RM198,500 for the three months. 3) The net cash flows are RM193,200, RM90,800, and RM194,500, leaving ending cash balances of RM243,200, RM

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    CASH BUDGET EXCERCISE

    QUESTION 1

    Armada Sdn Bhd’s sales from December 2018 to May 2019 are shown as follows:

    Month Sales (RM ‘000)


    Actual Sales November, 2018 230
    December, 2018 250
    January, 2019 180
    Forecasted Sales February, 2019 170
    March, 2019 220
    April, 2019 175
    May, 2019 210

    You are required to prepare the first-quarter cash budget of Armada Sdn Bhd for the
    year 2019 based on the following information:

    i. The firm generates 40 percent of cash sales. The credit sales normally will be
    collected on an equal amount in each of the two months following the sales.

    ii. The firm purchases raw materials one month in advance before sales which the
    purchases are approximately 40 percent of its monthly sales. The firm will pay
    its suppliers 50 percent of the purchases a month after and the balance is
    made two months after the purchases.

    iii. The firm is expected to receive rental payment of RM32,000 in February and
    RM11,000 in April 2019.

    iv. Salaries paid to employees are 15 percent of the previous month's sales.

    v. Rental expenses of RM12,000 per month are expected to be paid. However,


    the firm is expected to receive a 5 percent discount on the rental expenses in
    March 2019.

    vi. Interest expenses of RM6,400 is due in January and March 2019.

    vii. Cash bonuses to the employees of RM14,000 are expected to be disbursed in


    February 2019.

    viii. The firm plans to buy a new equipment by cash amounted to RM120,000 in
    February.

    ix. The firm has a cash balance of RM25,000 on December 31, 2018 wishing to
    hold a monthly minimum cash of RM13,000 for liquidity purpose.
    ANSWER QUESTION 1

    Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19

    Sales 230000 250000 180000 170000 220000 175000 210000


    1) RECEIPTS (INFLOWS)
    Cash Sales 40% 72000 68000 88000
    Lag 1 month 30% 75000 54000 51000
    Lag 2 months 30% 69000 75000 54000
    Receive Rental 32000
    TOTAL RECEIPTS 216000 229000 193000

    Purchases 92000 100000 72000 68000 88000 70000 84000 0


    2) Disbursement (OUTFLOW)
    Payment lag 1month 50% 46000 50000 36000 34000 44000
    Payment lag 2month 50% 46000 50000 36000 34000
    Salaries 15% 37500 27000 25500
    Rental Exps 12000 12000 11400
    Interest Expenses 6400 6400
    Bonuses 14000
    Equipment 120000
    TOTAL DISBURSEMENT 141900 243000 121300

    3) Net Cash Flow 74100 -14000 71700


    4) Reconciliation
    Net Cash Flow 74100 -14000 71700
    Plus: Beginning Balance 25000 99100 85100
    Ending Balance 99100 85100 156800
    Less: Min Cash Bal 13000 13000 13000
    Surplus/Deficit 86100 72100 143800
    QUESTION 2

    a) Bidara Sdn. Bhd.’s sales from May to October 2019 are tabulated below:

    Month Sales (RM)


    May 500,000
    June 360,000
    July 340,000
    August 440,000
    September 350,000
    October 420,000

    i) 30 percent of the firm’s monthly sales are on cash whilst the remaining sales
    are on credit, which are collected equally in the two subsequent months of
    sales.

    ii) The raw materials for monthly sales are purchased one month prior to sales
    and it amounts to 30 percent of the monthly sales. 40 percent of the
    purchases is paid in the month of purchase and the balance is paid equally in
    two months following the purchases.

    iii) Employees’ salaries are 10 percent of the monthly sales. The firm pays half-
    yearly RM30,000 of cash bonuses to its employees in January and July,
    respectively.

    iv) The firm pays property rental expenses of RM25,000 monthly and receives
    RM15,000 dividend from its marketable securities in September every year.

    v) Financing cost of RM12,000 is due in September and other miscellaneous


    expenses amount to RM5,000 is estimated to be paid every month.

    vi) Fully depreciated machines are to be replaced in August and its cost is
    expected to be RM100,000.

    vii) The firm’s cash balance at end of June is RM50,000 and it maintains
    RM25,000 minimum cash monthly.

    You are required to prepare the cash budget of Bidara Sdn. Bhd. for the third quarter
    of 2019 based on the financial information given above.
    (14 marks)

    ANSWER QUESTION 2

    b)
    Bidara Sdn Bhd
    Cash Budget for Third Quarter of Year 2019 (RM’000) /

    July August September


    Sales 340 440 350

    CASH RECEIPT:
    30%: Cash sales 102 / 132 / 105 /
    35%: 1 month after sales 126 / 119 / 154 /
    35%: 2 months after sales 175 / 126 / 119 /
    Dividend received - - 15 /
    Total receipt 403 / 377 / 393 /

    Purchases 132 / 105 / 126 /

    CASH DISBURSEMENT:
    40%: In month of purchase 52.8 / 42 / 50.4 /
    30%: 1 month after purchase 30.6 / 39.6 / 31.5 /
    30%: 2 months after purchase 32.4 / 30.6 / 39.6 /
    Salaries 34 / 44 / 35 /
    Cash bonuses 30 / - -
    Rental expenses 25 / 25 / 25 /
    Financing cost - - 12 /
    Miscellaneous expenses 5/ 5/ 5/
    Machines - 100 / -
    Total disbursement 209.8 / 286.2 / 198.5 /

    Net cash flow 193.2 / 90.8 / 194.5 /


    + Beginning cash balance 50 / 243.2 / 334 /
    Ending cash balance 243.2 / 334 / 528.5 /
    - Minimum cash required (25) / (25) / (25) /
    Cash surplus/(deficit) 218.2 / 309 / 503.5 /

    (56 / x 0.25m = 14 marks)

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