Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mat Shidi Sdn. Bhd. estimates its financing needs for 2020. The company's sales and forecasts are as follows: Month Sales (RM) Dec Sales (RM) Month
Mat Shidi Sdn. Bhd. estimates its financing needs for 2020. The company's sales and forecasts are as follows: Month Sales (RM) Dec Sales (RM) Month 80,000 Apr 70,000 Mei 70,000 Jan 50,000 Feb 95,000 Jun 5,000 Mar 40,000 Jul 70,000 In addition, other information regarding its financing projection is as follows: i) 30 percent of the company's sales revenue is collected during the month of sale, 65 percent is collected one month after the sale and the remainder is uncollected. ii) Purchase of stock made one month before sale. Raw material purchases make up 70 percent of sales. Supplier is paid one month after purchase. iii) Operating expenses are 10 percent of the monthly sales. Other fixed monthly expenses for rent, salary and depreciation were RM1,300, RM2,000 and RM1,600 respectively. iv) A tax deposit of RM1,500 was made in January. v) An investment dividend of RM3,000 will be received at the end of March. vi) The cash balance as at 31 December 2019 is RM7,000 and the minimum balance of RM3,000 must be maintained at all times. Based on the above information, prepare a cash budget for the three months ending March 31, 2020
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started