this answers is correct please I need the part 7 Cash Budget
Al Khaleej Automobile Company is a manufacturer and seller of automobile products. Information on actual and projected sales in units is given below for the Use this information to answer all parts of question one. Month Units September 2019 (budget) October 2019 (budget) November 2019 (budget) December 2019 (Budget) January 2020 (budget) 45,000 40,000 25,000 20,000 34,000 Required: 1. Prepare a Sales budget in units and dirham for the months of October to December 2019 and for the quarter in total. The selling price per unit is AED 50. [5 Marks] 2. Assume that the company collects 60% of its sales in the month of the sale, 40% in the month following the sale. Prepare a Cash Receipts schedule for 3 months ending December 2019 and total for the last two quarters of 2019. Accounts Receivable balance as of September 30, 2019 was AED 900,000. [15 Marks] 3. Refer to the projected sales that you have calculated. Prepare a Production Budget for 3 months ending December 2019 and total for the last quarter of 2019. The company's inventory at the end of each month must equal 20% of next month's sales. On September 30, 2019, inventory balance was 8,000 units. [10 Marks] 4. Prepare a Direct Materials Purchase Budget in quantity and in dollar amounts for 3 months ending December 2019 and total for the last quarter of 2019 based on the production budget above. One unit of product requires 8 ounces of materials and the company's policy is to maintain an ending inventory of materials equal to 30% of next month's production needs. Each ounce of direct materials cost AED 3.50. September 30, 2019 inventory balance was 88,800 ounces. [16 marks] 5. Assuming that the company's policy is to pay 70% of each month's cost of materials purchases in the same month and 30% in the month after, prepare a Cash Disbursement (cash payment) schedule for 3 months ending December 2019 and total for the last quarter of 2019. The accounts payable balance at the end of September 2019 was AED 351,960. [17 Marks] 6. The following are the projected cash expenditures for 2019 in AED: Sept. Oct. Nov. Dec. 93,000 101,000 90,000 59,000 Manufacturin g Overhead 41,000 73,000 44,000 42,000 Selling Expense 169,000 182,000 150,000 147,000 Administrativ e Expense Direct Labor 132,000 120,000 90,000 90,000 300,000 600,000 Equipment purchase On September 30, 2019, the company had a cash balance of AED 147,840 on hand. The company has an arrangement with their bank to have a bank overdraft policy of maximum AED 250,000 as and when needed and borrows in the nearest '000s. The interest on the overdraft is 1.2% per month and paid at the time of loan repayment. The company also have a policy of maintaining a minimum cash balance of AED 100,000 at the end of each month. In November, the company plans to pay a dividend of AED 300,000. 7. Prepare a Cash Budget for the last 3 months of 2019. [30 Marks) 6- Cash Budget 2019 (in UAE) October November December Total 147,840 3,171,120 3,305,736 147,840 2,100,000 1,550,000 1,100,000 147,840 2,247,840 4,721,120 4,405,736 4,897,840 Beginning cash balance cash resepits from sales Total Available cash Lees Cash payments Direct materials purchases Direct Labor MOH Selling Expense Administrative Expense Equipment purchase Total Cash payments Cash balance per operating expense 1,000,720 741,384 711,312 120,000 90,000 90,000 101,000 90,000 59,000 73,000 44,000 42,000 182,000 150,000 147,000 600,000 2,076,720 1,115,384 171,1203,05,735 3,356,424 3,305,736 100,000 100,000 100,000 271,120 3,000,000 3,171,120 3,305,736 3,356,424 2,453,416 300,000 250,000 359,000 479,000 600,000 4,441,416 456,424 Minimum Cash balance Project amount to borrow Amount to borrow from the bank Ending Cash balance 100,000 271,120 3,000,000 3,356,424 Purchases Value payments 70% in the month of purchases 30% in the month following the purchases Total disbursrmrnts per month October November December Total 926,800 661,920 732,480 2,321,200 648760 463344 512736 1,624,860 351,960 278040 198576 828,576 1,000,720 741384 711312 2,453,416
