Question
The CEO of MGT Manufacturing was presented with the cash budget for 2021. She was not happy with the budget as it showed a negative
The CEO of MGT Manufacturing was presented with the cash budget for 2021. She was not happy with the budget as it showed a negative cash balance at the end of March and June. She has inquired from CIMB Bank for a loan. The bank has agreed to provide a short-term loan of 9 months with an interest rate of 6%. The CEO has requested you to prepare a new cash budget in consideration of the loan facility from the bank. She also has instructed that cash balance at any time should not be tess than RM25,000.
Based on the above information prepare a new Cash Budget, Income Statement and Balance Sheet. (Total: 30 Marks)
CASH BUDGET March June September December Annual
Cash Balance Beginning 32,500 - 34,350 - 30,100 600 32,500
ADD: Receipts 450,000 500,000 500,000 500,000
Total Cash Available 482,500 465,650 469,900 500,600
Less Disbursements 516,850 495,750 469,300 451,100
Excess (Deficits) of Cash -34,350 -30,100 600 49,500 49,500
Financing
Borrowing in the quarter
Repayment of Borrowin s
Interest
Total Financing
Cash Balance Ending - 34,350 - 30,100 600 49,500 49,500
INCOME STATEMENT 2021
Sales - 2000000
Cost of Goods Sold - 1300000
Gross Margin 700,000
Selling and Administration Expense 576,000
Net Operating Income 124,000
Interest Expense
Net Income 124,000
Previous Retain Earnings 449,900
Add: Net Income 124,000
Less: Dividends 20,000
New Retain Earnings 553,900
BALANCE SHEET 2021
Current Assets
Cash 49,500
Account Receivables 150,000
Raw Materials 6,900
Inventories 39,000
Total Current Assets 245,400
Land 80,000
Plant and Machines 830,000
Less: Accumulated Depreciation 392,000
Plant and Machines Net 438,000
TOTAL ASSETS 763,400
Current Liabilities
Accounts Payable 34,500
Total Current Liabilities 34,500
Stockholders' Equity
Common Stock 175,000
Retained Earnings 553,900
Total Equity 728,900
TOTAL LIABILITIES AND EQUITY 763,400
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