1) The following data relates to one process during May. Description Amount Input material 5,000 tonnes costing $15,000 Labor Cost $6,000 Overhead Cost $10,025 Normal loss equal to 10% of input and has a scrap value of $4 per ton Answer:- PROCESS ACCOUNT Description Kg Amount Description Kg Per Kg Amount Q 2 Operating Budget Gulf Company has the following budgeted sales and operating expenses for the second quarter of 2010: April May June Sales 900,000 800,000 1,000,000 Operating Expenses: Rent expense 20,000 20,000 20,000 Insurance expense 10,000 10,000 10,000 Other Selling and Admin. 96,000 88,000 117,000 Total operating expenses 126,000 118,000 147,000 The following additional information is also available about the companys operations: 1. February sales were AED 830,000 and March sales were AED 360,000. 2. All sales are credit sales and are collected as follows: 45% in the month of sale 35% in the month following sale 20% in the second month following sale 3. Purchases of inventory are budgeted as follows: April 500,000 May 480,000 June 600,000 Inventory purchases are paid for 60% in the month of purchase and 40% in the month following the purchase. Inventory purchases in March were AED 400,000. 4. The rent and insurance are payable quarterly in advance at the beginning of the first month of each quarter (i.e. January, April, July & October). 5. All other cash operating expenses will be paid for in the month incurred. 6. Equipment costing AED 200,000 will be purchased for cash in April. Equipment costing AED 30,000 will be purchased for cash in May. 7. All borrowings take place at the beginning of a month and at an interest rate of 9% per annum. All repayments and interest payments are made at the end of the month whenever cash is available. 8. The cash balance as at March 31st, 2010 was AED 30,000. The Gulf Company must maintain a minimum cash balance of AED 25,000 at all times. Required 1. Prepare a schedule of expected cash collections from sales for April, May and June. 2. Prepare a schedule for April, May and June showing budgeted cash disbursements to suppliers for inventory purchases. 4. Prepare a cash budget for April, May and June of 2009. Show borrowings from the bank as well as repayments needed to keep the minimum required cash balance. Mid East Company Schedule of expected cash collections April May June Mid East Company Schedule of expected cash disbursements April May June Mid East Company Cash budget for the quarter April May June Cash Balance, Beginning Add: cash receipts Total cash available Less: disbursements: Total disbursements Excess (deficiency) of cash Financing Borrowing Repayments Interest Total Financing Ending Cash Balance