Question

Question 1 Tijari Sdn Bhd is a main distributor of Mediterranean juices in Kuala Lumpur. The company's Budgeted Statement of Financial Position as of 30" June 2018 is shown below: Tijari Sdn Bhd Statement of Financial Position as at 30" June 2018 Assets Cash Accounts receivable RM 90,000 136,000 Inventory Plant and equipment, net of depreciation Total assets 100,000 210,000 536,000 Liabilities and shareholders' equity Accounts payable Common shares Retained earnings Total liabilities and shareholders' equity 109,100 327,000 99,900 536,000 Mr Muiz, a newly hired accountant is preparing a master budget for the third quarter of 2018. He just attended a monthly operational meeting and gathered the following information: • Estimated sales for July to October 2018 will be as below: July RM65,000 RM70,000 RM83,000 RM90,000 RM200,000 RM250,000 RM300,000 RM350,000 RM265,000 RM320,000 RM383,000 RM440,000 August September October Cash sales Sales on account Total sales • Sales on account are collected over a three-month period: 20 percent collected in the month of sale, 60 percent in the month following the sale and 18 percent in the second month following the sale. The remaining 2 percent is uncollectible. • The company's cost of goods sold is 70 percent of sales. Each month's ending inventory should equal to 30 percent of next month's cost of goods sold. • With the long relationship with manufacturer, the company pays 50 percent of the juices in the month of purchase and another 50 percent is in the month following the purchase. Its monthly selling and administrative expenses are estimated RM55,000 inclusive of depreciation expense of RM5,000 The company purchased vehicles in the beginning of the year and the monthly instalments are RM12,000 throughout the year. The bonuses to be paid to its employees in each month of July and September are RM40,000. The insurance premium for the warehouse of RM60,000 is due in July. The company's policy is to maintain a minimum cash balance of RM20,000 and may seek short term Islamic financing from a local bank at a monthly profit rate of 2 percent per month. The company may arrange to get the financing at the beginning of any month needing the financing and may repay all or any amount of the financing, at the end of any month together with the profits due. Required: (a) Prepare the following: (Hint: Prepare columnar form of schedules/budgets) a schedule of cash collections for July, August and September 2018. i. (5 marks) ii. a merchandise purchase budget for July, August and September 2018 and the total for the third quarter of 2018. (6 marks) a schedule of cash disbursements for merchandise purchases for July, August and iii. September 2018. (4 marks) iv. a cash budget for July, August and September 2018 and the total for the third quarter of 2018. Indicate in the financing section any financing that will be needed during the quarter. (10 marks) [Total: 25 marks]

Answer 1

300,000 10,2000 - Schedule lash Collection (in RM) Tine July August SGPTEMBER Sles an Accout. 1170000 200.000 | 250,000 Collection of% in the month of Sale 34000 40000 50000 60000 604. & the following 10,000 153000 month of salle 187. On the second 1.36000 * month of sale Total Collection each month 34000 1482,000 100,600 1046000 (1) Merchandise Purchase budget | July August September Pokal Cost of goods solel. 195,500 204,000 268,100 (cash + Credit sales **0/100) 30600, Adad losing inventory (30% of next month's COG) 67200 80450 92400, less opening shake stocle of Inventory (100,000) (670007souso) Merchandise Prerchase during each month too | 737930 P80000 670000 Ics Scanned with CamScanner

(1) lash disbursement for merchandise purchase I aquly August September → 50% paid on the month 96350 | 18615 140035 of purchase u (sopher Premious e ) ( >> Previous month's balance in 109100 / 763501118615 ricerned paid Cash disbarsment for Purchase in each month L 185450 194965 1958650 (IV) Total lash budget for the queritor (Cash Required) July Augent Septento total » Purchase payment (185,400 19.4965258.650 Belley and Administrabil 50000 50000 50000 experise (les 5000 elepreciadal oo Vehicle installment. 12000 12000 12000, - Bonus payable 40000 40000 |- Insurance Premium | 60000 I lash Required 3474601 256965360650 965065 Scanned with CamScanner

- Notes - Accounts Reconeble in June will be recented in July and August. . a> for Calculating closing inventory of September 1 october's sales will be taken For the month of July. RM 277450 meet (347480 - 20000 - 90000) to Requis may requiriced to obtain from local bark cs Camare Stwatterm Jolamide financing.