Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION he Cooking House (CH) is a retailer of a wide range of kitchen and dining room items, such as coffee makers, silverware and table

image text in transcribed
QUESTION "he Cooking House (CH) is a retailer of a wide range of kitchen and dining room items, such as coffee makers, silverware and table linens. \"he followings are extracts of the Sales Budget for the four months in 20 9 and Statement of Financial Position as at 31 March 2019: Extract of Sales Budget Year 2019 April May June July Sales (RM) 50,000 80,000 60,000 50,000 On average, 60% of sales are cash sales and the remaining 4 % are credit sales. CH offers the retailers and agents to settle the credit sales in two months: 50% in the months following the sale and the remaining 50% in the second month following the sale. Sales in February and March were RM40,000 and RM60,000 respectively. Extract of Statement of Financial Position as at 31 March 2019 Current/13mm RM Cash 10,000 Accounts receivables 32,000 Merchandise inventory 48,000 FmedAssets Equipment 37,000 Accumulated depreciation 12,800 Current liability and Owners 'Equz'ty Accounts payables 16,800 For purchases of merchandise items, CH pays 50% 0 each month's purchases during the month of purchase. Therefore, the accounts payable balance on 31 March is 5 % of March's purchases. The company 3ays xed wages of RM2,500 and commissions equal to 15% of sales each month. CH also plans to purchase new xtures for RM3,000 cash in April. Other monthly operating expenses which the company incurs are as follows: Miscellaneous expenses 5% ofsales Rent RV 2,000 Insurance R\\1200 Depreciation, including new xture R\\1500 CH struggles to come up with cash to pay for purchases and operating expenses. To meet cash needs, the company uses short term credit facilities from a local bank, paying them when excess cash is available. CH maintains a minimum RMl0,000 cash balance at the end of each month for operating purposes and can borrow or repay credit facilities only in multiples of RMl,000. Assume CH has the credit facilities at the beginning and repayment occur at the end of the month. Also assume that the cost of the credit facilities is 1% per month and is paid in cash at the end of each month. Required: (at) Prepare the Schedule of Cash Collection for the months of April, May and June. (5 marks) (b) Prepare the Schedule of Cash Disbursement for the merchandise purchases for the months of April, May and June. (0) Prepare a Cash Budget for the months of April, May, June and the total for the quarter

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John J. Wild, Ken W. Shaw

2010 Edition

9789813155497, 73379581, 9813155493, 978-0073379586

Students also viewed these Accounting questions

Question

explain the distinguishing features of contract costing;

Answered: 1 week ago

Question

=+c) Compute the CV and RRR for each decision.

Answered: 1 week ago