PART C 2. Prepare the following budgets and schedules for the third quarter of 2020 (July-September). (95 marks) a. Sales budget (6 marks) b. Schedule of expected cash collections from sales (15 marks) C. Schedule of expected cash disbursements for purchases and expenses (27 marks) d. Cash Budget (31 marks) e. Analyse the cash collection schedule and provide your judgement and recommendations for MarHan Shoes. (6 marks) f. Analyse the cash disbursement and purchase schedule and provide your judgement. (8 marks) g. Comment on your general findings (based on the cash collection schedule, cash disbursement and purchase schedule, and cash budget) and explain to Maryam and Hanadi the importance of preparing Budgets. (8 marks) 250 The following information is available about the company's operations. i. The company predicts a sale price of AED 350 per unit. Sales in units from July - September, 2020 are as follows: Month Sales (Units) July August 300 September 400 All sales are on credit and are collected in the following ratio: 45 percent collected in the month of sale, 30 percent collected in the month after sale. 25 percent collected in the second month after sale. ii. Cost of purchases are as follows. Month Cost (AED) 120,000 August 135,000 September 110,000 July 500 All purchases are on credit. 40% percent of a month's inventory purchases are paid in the month of purchases and 60% in the month after purchases. iii. Operating expenses are budgeted per month as follows. Operating expenses Amount (AED) Insurance Utilities 400 Salaries & wages 7,000 Rent 8,000 Other expenses 5,500 iv. The company plans to borrow AED 55,000 in the month of July with an interest of 1.5% of the borrowed amount per month starting from August. The loan is to be paid in full at the end of September, 2020. The Company will have a cash balance of AED 33,000 on 01 July, 2020. V. PART C 2. Prepare the following budgets and schedules for the third quarter of 2020 (July-September). (95 marks) a. Sales budget (6 marks) b. Schedule of expected cash collections from sales (15 marks) C. Schedule of expected cash disbursements for purchases and expenses (27 marks) d. Cash Budget (31 marks) e. Analyse the cash collection schedule and provide your judgement and recommendations for MarHan Shoes. (6 marks) f. Analyse the cash disbursement and purchase schedule and provide your judgement. (8 marks) g. Comment on your general findings (based on the cash collection schedule, cash disbursement and purchase schedule, and cash budget) and explain to Maryam and Hanadi the importance of preparing Budgets. (8 marks) 250 The following information is available about the company's operations. i. The company predicts a sale price of AED 350 per unit. Sales in units from July - September, 2020 are as follows: Month Sales (Units) July August 300 September 400 All sales are on credit and are collected in the following ratio: 45 percent collected in the month of sale, 30 percent collected in the month after sale. 25 percent collected in the second month after sale. ii. Cost of purchases are as follows. Month Cost (AED) 120,000 August 135,000 September 110,000 July 500 All purchases are on credit. 40% percent of a month's inventory purchases are paid in the month of purchases and 60% in the month after purchases. iii. Operating expenses are budgeted per month as follows. Operating expenses Amount (AED) Insurance Utilities 400 Salaries & wages 7,000 Rent 8,000 Other expenses 5,500 iv. The company plans to borrow AED 55,000 in the month of July with an interest of 1.5% of the borrowed amount per month starting from August. The loan is to be paid in full at the end of September, 2020. The Company will have a cash balance of AED 33,000 on 01 July, 2020. V
