Question
Sushi House has budgeted sales revenues as follows: June (RM) July (RM) August (RM) Credit sales 85,000 80,000 72,000 Cash sales 14,000 25,000 32,000 Total
Sushi House has budgeted sales revenues as follows: June (RM) July (RM) August (RM) Credit sales 85,000 80,000 72,000 Cash sales 14,000 25,000 32,000 Total sales 99,000 105,000 104,000 (i) Past experience indicates that 70% of the credit sales will be collected in the month of sale and the remaining 30% will be collected in the following month. (ii) Purchases of inventory are all on credit and 60% are paid in the month of purchase and 40% in the month following purchase. (iii) Budgeted inventory purchases are: June RM 45,000 July RM 43,000 August RM 40,000 (iv) Other cash disbursements budgeted are: monthly selling and administrative expenses of RM 14,000; dividends of RM 30,000 to be paid in July; and purchase of a computer in August for RM 30,000 cash. (v) The company wishes to maintain a minimum cash balance of RM 20,000 at the end of each month. The company borrows money from the bank at 9% interest whenever necessary to maintain the minimum cash balance. Borrowed money is repaid in months when there is an excess cash balance. (vi) The beginning cash balance on 1 July was RM25,000. (vii) All amount borrowed during a month are borrowed on the first day. The loan balance as of 1 July is RM 26,000. Required: Prepare a cash budget for the month of July. Prepare separate schedules of cash budget
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