Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Simponi's projected sales for the first 8 months of 2022 are as follow: May June January February March April RM360,000 RM480,000 RM540,000 RM960,000 RM1,200,000 RM1,000,000

image text in transcribed

Simponi's projected sales for the first 8 months of 2022 are as follow: May June January February March April RM360,000 RM480,000 RM540,000 RM960,000 RM1,200,000 RM1,000,000 RM880,000 RM600,000 July August 20% of the sales are for cash, another 50% are collected in the month following the sales and 30% are collected in the second month following sales. Sales of November and December, 2021 are expected to be RM800,000 and RM680,000 respectively. Simponi purchases its raw materials two month in advance of its sales and the purchases are 70% of final sales price. The supplier is paid 1 month after delivery. Other monthly expenses for Simponi are RM40,000 for rental, RM50,000 for depreciation and RM80,000 for other expenditure. Tax of RM120,000 are paid in June. The company's cash balance on December 31th 2021 is expected to be RM100,000, which is the minimum balance the firm wants to maintain. Any borrowing that is needed to maintain the minimum cash balance is paid off in the subsequent month if there is sufficient cash. The company can borrow at 12% interest rate and the interest is paid monthly. Prepare the monthly cash budget for Simponi for January to June 2021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

The New Retirementality Planning Your Life And Living Your Dreams At Any Age You Want

Authors: Mitch Anthony

4th Edition

1118705122, 978-1118705124

More Books

Students also viewed these Finance questions

Question

What characterises your dealings with other people?

Answered: 1 week ago