Question

Auni Bhd has a cash balance of RM 27,000 at the beginning of March. Month Cash Credit Purchases Salaries Fixed Sales Sales Overhead (RM) (RM) (RM) (RM) (RM) Jan 74,000 55,200 9,000 30,000 Feb 82,000 61,200 9,000 30,000 March 20,000 80,000 60,000 9,500 30,000 April 22,000 90,000 69,000 9,500 32,000 May 25,000 100,000 75,000 10,000 32,000 Additional information: Creditors are given one month credit for payment. Salaries are paid in the current month. Fixed costs are paid one month in arrears and include a charge for depreciation of RM 5,000 per month. Credit sales are settled as follows: 40% in the month of sale, 45% in the next month and 12% in the following month. The balance represents bad debts. Required: (0) To prepare a cash budget for the month of March, April and May. (12 marks)

Answer 1

(i)

Cash Budget
	March	April	May
Beginning Balance	$        27,000	$        29,080	$        38,420
Cash Collections	$        97,780	$      103,840	$      115,100
Total Cash Available	$     124,780	$     132,920	$     153,520
Cash Disbursements
Purchases	$        61,200	$        60,000	$        69,000
Salaries	$          9,500	$          9,500	$        10,000
Advertising	$        25,000	$        25,000	$        27,000
Total Cash Disbursements	$        95,700	$        94,500	$      106,000
Ending Balance	$        29,080	$        38,420	$        47,520

Cash collections schedule
	March	April	May
Cash Sales	$        20,000	$        22,000	$        25,000
Collection from Credit Sales
January Sales	$          8,880
February Sales	$        36,900	$          9,840
March Sales	$        32,000	$        36,000	$          9,600
April Sales		$        36,000	$        40,500
May Sales			$        40,000
Total Cash Collections	$        97,780	$     103,840	$     115,100

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