Question 2

Anggun Ayu Bhd has furnished the following information for the purpose of preparing its cash budget for the last quarter of year 2019:

Month

Sales (units)

Purchases (RM)

Wages and salaries (RM)

Overheads (RM) (exclude depreciation on machinery)

July

5,500

16,000

10,000

5,000

August

5,400

20,000

12,000

5,000

September

5,600

18,000

12,000

5,000

October

4,000

16,000

12,000

4,000

November

4,500

14,000

14,000

4,000

December

3,800

14,000

14,000

4,000

Additional information:

1.Opening cash balance in October 2019 is expected to be RM5,000. The selling price for each units is RM5.

2.10% of the sales are cash sales. 40% of the credit sales will be paid one month after sales and the remaining balance will be paid two months after sales.

3.15% of purchases will be paid in the month if purchase and the remaining balance will be paid the following month.

4.Wages and salaries are to be paid 80% in the month incurred and the remaining balance will be paid in the following month.

5.Overheads are to be paid one month in arrears. The depreciation on machinery is RM2,000 per month.

6.A bank loan of RM22,000 is expected to be received in November 2019. The monthly payment is RM900 and the first payment will be in December 2019.

7.The company will receive dividend revenue and rental income amounted to RM10,000 and RM6,000 respectively in October 2019.