(b) Nazmi Shah Sdn Bhd wishes to expand its business by opening an additional two more stores and needs toapply a bank loan. Therefore, there is needed to prepare an acceptable three-month financial plan for Januaryuntil March. The following are sales and purchase information:Sales (RM) Purchase(RM)160,000150,000MonthNovemberDecemberJanuaryFebruaryMarch235,000255,000210,000280,000110,000150,000240,000190,00040 percent of the sales incurred are cash sales, while the balance are credit sales and will be collected equally forthe second and third month after the sales. Nazmi Shah pays 50 percent of its purchase immediately and thebalance will be paid in the month after purchases. 40 percent of the sales incurred are cash sales, while the balance are credit sales and will be collected equally forthe second and third month after the sales. Nazmi Shah pays 50 percent of its purchase immediately and thebalance will be paid in the month after purchases.Additional information:i. Labor expenses are 10 percent of the current month's sales.ii. Overhead expenses are recorded at RM10,000 per month.iii. Interest payments of RM8,000 are due in January and March.iv. A cash dividend of RM40,000 is scheduled to be paid in February.v. Depreciation expenses are RM10,000 per month.vi. Tax payment of RM25,000 are due in January and April.vii. Purchase a new asset of RM40,000 in January and February.Nazmi Shah ending cash balance in December is RM50,000. The minimum desired cash balance is RM50,000 permonth. Any financing shortfall, Interest on accumulated loan is at 9 percent annual interest and paid in thefollowing monthly.Based on the information given, prepare a cash budget for the months of January, February and March.

Cash Budget is a summary estimation of cashflows during a specified interval. It helps in…

Answered: Based on the information given, prepare…

Business

Accounting

Based on the information given, prepare a cash budget for the months of January, February and March.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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III. The Simmons Company is planning to request a line of credit from its bank. The following sales forecasts have been made for parts of 2017 and 2018: In Rs May 2017 150,000 June 150,000 July 300,000 August 450,000 September 600.000 October 300,000 November 300,000 December 75,000 January 2018 150,000 Collection estimates obtained from the credit and collection department are as follows: collected within the month of sale, 5 percent; collected the month following the sale, 80 percent; collected the ond month following sale, 15 percent. Payments for labor and raw materials are typically made during the month following the month in which these costs are incurred. Total labor and raw materials costs are estimated for each month as follows: In Rs May 2017 75,000 June 75,000 July 105,000 August 735,000 September 255,000 October 195,000 November 135,000 December 75,000 General and administrative salaries will amount to approximately Rs 22,500 a month; lease payments under long-term lease…
Nazmi Shah Sdn Bhd wishes to expand its business by opening an additional two more stores and needs to apply a bank loan. Therefore, there is needed to prepare an acceptable three-month financial plan for January until March. The following are sales and purchase information: 40 percent of the sales incurred are cash sales, while the balance are credit sales and will be collected equally for the second and third month after the sales. Nazmi Shah pays 50 percent of its purchase immediately and the balance will be paid in the month after purchases. Additional information: i. Labor expenses are 10 percent of the current month’s sales.ii. Overhead expenses are recorded at RM10,000 per month.iii. Interest payments of RM8,000 are due in January and March.iv. A cash dividend of RM40,000 is scheduled to be paid in February.v. Depreciation expenses are RM10,000 per month.vi. Tax payment of RM25,000 are due in January and April.vii. Purchase a new asset of RM40,000 in January…
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