Question

In: Finance

One of your duty as employee of Wanlap Company is to prepare the cash budget for...

One of your duty as employee of Wanlap Company is to prepare the cash budget for the
period from 1 January to 30 June 2020.

Use the following information to assist you in preparing that budget:

-80 per cent are credit sales; 80 per cent of credit sales will be collected in the next
month; 15 per cent will be collected 60 days after sales and 4 per cent more will be
collected 90 days after sales. The company had to bear one per cent of credit sales
as uncollectable debt (bad debt).

-Purchases made every month are 65 per cent of sales forecasted for the next
month. Payment for these purchases will only be made one month after purchase.

-The company intends to maintain a minimum cash balance of RM300,000. The
cash balance on 1 January is RM300,000.

-The company expects the delivery of a new machine in the month of April.
Payment of RM400,000 will be made after delivery had been done.

-Payment for tax of RM500,000 will be made in the month of March and June.

-Rental of RM100,000 per month. Other cash expenditure is 3 per cent of sales.

-The depreciation expenses are RM150,000 per month.

-Labor expenses are 10 per cent of sales for the next month.

-The company’s board of directors intends to maintain the dividend payment of
RM450,000 that will be made in the month of June.

-Sales in the month of October are RM3,000,000 and RM2,000,000 in the months
of November and December 2019 respectively.

-Sales forecast for the first seven months in the year 2020 is as follows:

Months Sales
January
February
March
April
May
June
July
3,000,000
5,000,000
5,000,000
6,000,000
3,000,000
2,000,000
2,000,000

-The company will make interest payments in the month of June for RM310,000.

Prepare the following:
(A)Forecasted Cash Received schedule.

(B)Forecasted Monthly Cash Payment schedule.

(C) Cash Budget from January until 30 June 2020.

Solutions

Expert Solution

Based on the given data, pls find below workings:


Related Solutions

One of your duty as employee of Wanlap Company is to prepare the cash budget for...
One of your duty as employee of Wanlap Company is to prepare the cash budget for the period from 1 January to 30 June 2020. Use the following information to assist you in preparing that budget: -80 per cent are credit sales; 80 per cent of credit sales will be collected in the next month; 15 per cent will be collected 60 days after sales and 4 per cent more will be collected 90 days after sales. The company had...
I. (25) Cash Budget for New Toys Company: Prepare a cash budget and provide advices for...
I. (25) Cash Budget for New Toys Company: Prepare a cash budget and provide advices for the second quarter of 201x based upon the following information:  The firms’ sales during February and March of 201x were $1,528,000 and $1,662,000, respectively. Sales during the next four months are projected to be : April $1,950,000 May $2,700,000 June $2,400,000 July $2,100,000  Historically, 100% of the firm’s sales are on credit, with about 60% of each month’s sales collected one month...
Naa Tetterley Company Ltd engaged your firm to prepare a Cash Budget for them. They informed...
Naa Tetterley Company Ltd engaged your firm to prepare a Cash Budget for them. They informed you that: a. They have two bills payable of $55,000 and $60,000 with due dates of 31st July and 30th September, 2020 respectively. These bills will be paid on their due dates b. The Company wishes to arrange with its bankers for any necessary re-financing in advance, which will ensure a minimum end of month cash balance of $25,000 You are also given the...
On this topic, you are required to prepare your monthly cash budget for the month of...
On this topic, you are required to prepare your monthly cash budget for the month of June 2020, if (assuming) there are 4 different sources of income and 12 different expenses and debt repayments. “Preparing monthly cash budget is an indicator for your personal financial growth’’. In reference to this statement, you are required to provide the reasons/importance of preparing your monthly cash budget. (1200 words) Note: Please write 1200 words
E5-14 Prepare a cash budget for two months. Rigley Company expects to have a cash balance...
E5-14 Prepare a cash budget for two months. Rigley Company expects to have a cash balance of $46,000 on January 1, 2017. These are the relevant monthly budget data for the first two months of 2017. 1. Collection from customers: January $71,000 and February $146,000. 2. Payments to suppliers: January $40,000, February $75,000. 3. Wages: January $30,000 and February $40,000. Wages are paid in the month they are incurred. 4. Administrative expenses: January $21,000 and February $24,000. These costs include...
Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget...
Cash Budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: September October November Sales $119,000 $151,000 $190,000 Manufacturing costs 50,000 65,000 68,000 Selling and administrative expenses 42,000 45,000 72,000 Capital expenditures _ _ 46,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $129,000 $164,000 $213,000 Manufacturing costs 54,000 71,000 77,000 Selling and administrative expenses 37,000 44,000 47,000 Capital expenditures _ _ 51,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the...
Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget...
Cash Budget The controller of Shoe Mart Inc. asks you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: January February March Sales $89,000 $105,000 $144,000 Manufacturing costs 37,000 45,000 52,000 Selling and administrative expenses 26,000 28,000 32,000 Capital expenditures _ _ 35,000 The company expects to sell about 12% of its merchandise for cash. Of sales on account, 70% are expected to be collected in full in the month...
Cash Budget The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget...
Cash Budget The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: March April May Sales $130,000 $155,000 $205,000 Manufacturing costs 55,000 67,000 74,000 Selling and administrative expenses 38,000 42,000 45,000 Capital expenditures _ _ 49,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $126,000 $160,000 $205,000 Manufacturing costs 53,000 69,000 74,000 Selling and administrative expenses 37,000 43,000 45,000 Capital expenditures _ _ 49,000 The company expects to sell about 15% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT