Question $2$

PT Ltd operates to sell furniture. It is not preparing a cash budget for September, October and

November.

At the end of August, the cash balance is $$4,000.$ The sales amount in August, September,

October and November are $$200,000,$$$350,000,$$$400,000$ and $$425,000,$ respectively. PT

Ltd expects to receive cash from $24\%$ of sales in the month of sales, $44\%$ in the month

following sales, $21\%$ in the second month following sales, and $8\%$ in the third month

following sales. $3\%$ of the sales will be uncollectible.

The amounts of purchase in August, September, October, and November are $$115,000,$

$$275,000,$$$185,000,$ and $$180,000,$ respectively. PT Ltd expects to pay $85\%$ of the amount of

purchase in the month following purchase and $15\%$ in the second month following purchase.

Expenses incurred as follows:

PT Ltd paid cash for expenses that incurred in the month.

PT Ltd entered into agreement with a bank that PT Ltd is required to maintain a minimum

cash balance of $$100,000$ at month end. The company can borrow money from the bank. If

PT Ltd has excessive cash, it will repay the loan to the bank. There is no loan balance at the

beginning of September. The annual interest rate is $12\%.$ Interest expense is paid monthly at

month end. PT repay or borrow money from the cash in multiple of $$50,000$ at month end.

Required:

Prepare a cash budget in September, October and November.