Olive Sdn Bhd needs a cash budget for October. The following information is available: The cash balance
Fantastic news! We've Found the answer you've been seeking!
Question:
Olive Sdn Bhd needs a cash budget for October. The following information is available:
- The cash balance at the beginning of October is RM9,000.
- The actual sales for August and September and expected sales for October are as follows:
August (RM) | September (RM) | October (RM) | |
Cash sales | 6,500 | 5,250 | 7,400 |
Sales on credit | 20,000 | 30,000 | 40,000 |
Total sales | 26,500 | 35,250 | 47,400 |
Credit sales are collected over a 3-month period in the following ratio:
a. 10% in the month of sale
b. 70% in the month following sale
c. 18% in the second month following sale
d. 2% remaining are uncollectable
- Purchases of inventory will total RM25,000 for October, 20% will be paid for in October. Accounts payable from Septembers inventory purchases is RM16,000, this will be paid in October.
- Selling and administrative expenses are budgeted at RM13,000 for October, of this amount, RM4,000 is for depreciation.
- Equipment costing RM18,000 will be purchased for cash during October, and cash dividends of RM3,000 will be paid during the month.
Posted Date: