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Besar Kecik Sdn Bhd assigning Hakim and Hana to prepare cash budget for the company. Besar Kecik Sdn Bhd is attempting to estimate its
Besar Kecik Sdn Bhd assigning Hakim and Hana to prepare cash budget for the company. Besar Kecik Sdn Bhd is attempting to estimate its needs for funds during each of the months covering the third quarter of 2021. Pertinent information is given below: a. The projected sales for 2021 of Besar Kecik Sdn Bhd are as follows: RM110 000 April RM80 000 May RM95 000 July August RM140 000 June RM60 000 September RM100 000 October RM120 000 b. 40% of sales are for cash, with the remaining 40% collected in the month following the sale and the remaining 15% will collected in the next two months. Rent expense is RM2 000 per month but it will increase by 25% starting on July 2021. C. d. A quarterly interest payment on RM150 000 in 8% notes payable is to be paid during August 2021. e. Wages and salaries are estimated as follows: April May RM8 000 RM8 500 July August RM10 000 RM12 000 June RM8 000 September RM12 000 f. Wages are paid on the 1st date of next month. Purchases are made in the same month to the anticipated sales. g. Besar Kecik Sdn Bhd pays 70% of the sales price and makes payment in the same month in which the sales occur. h. Besar Kecik Sdn Bhd plans to buy a new machine cost RM50 000 and pays 15% as a deposit that will be paid on the first month of the third quarter and the balance will be paid on the 30th September 2021 i. j. Short-term loans can be obtained at the end of each month at 13% annual interest with interest paid during each month for which the loan is outstanding. Besar Kecik Sdn Bhd ending cash balance for June 30, 2021 is RM67 000: the minimum balance the firm wishes to have in any month is RM25 000. Prepare a cash budget for Besar Kecik Sdn Bhd for the third quarter of 2021.
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