December2021. Other costs are included in the notes below: July Aug Sept Oct Nov Dec RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Sales of chocolatesand flowers 500 532 564 612 640 660 Purchases ofchocolates andflowers 250 266 282 306 320 330 Administrationexpenses 110 120 124 130 136 140 Packaging costs Miscellaneousexpenses a 12 12 14 14 16 16 Loan repayments 100 100 Notes: Stocks of chocolates and flowers (at cost) are estimated at RM500,000 at 1 July 2021 and RM340,000 at31 December 2021. Suppliers allow one month's credit. Purchases in June 2021 will total RM120,000. 30% of sales are paid for in the month of sale. The remainder are paid for in the month following themonth of sale. June 2021 sales are expected to be RM280,000. Delivery costs are 1% of sales revenue each month paid in the month in which they are incurred. Administration and miscellaneous expenses are also paid in the month incurred. Packaging costs are paid two months after they are incurred. These costs will be RM2.000 in May 2021and are expected to be the same in June 2021. A bank overdraft of RM310,000 is expected on 1 July 2021. The bank charges interest of 1% per monthfor the overdraft, calculated on the closing balance each month, and payable the following n Loan repayments refer to a bank loan which is interest free until January 2022. The business has no depreciable fixed assets. Required:
December2021. Other costs are included in the notes below: July Aug Sept Oct Nov Dec RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Sales of chocolatesand flowers 500 532 564 612 640 660 Purchases ofchocolates andflowers 250 266 282 306 320 330 Administrationexpenses 110 120 124 130 136 140 Packaging costs Miscellaneousexpenses a 12 12 14 14 16 16 Loan repayments 100 100 Notes: Stocks of chocolates and flowers (at cost) are estimated at RM500,000 at 1 July 2021 and RM340,000 at31 December 2021. Suppliers allow one month's credit. Purchases in June 2021 will total RM120,000. 30% of sales are paid for in the month of sale. The remainder are paid for in the month following themonth of sale. June 2021 sales are expected to be RM280,000. Delivery costs are 1% of sales revenue each month paid in the month in which they are incurred. Administration and miscellaneous expenses are also paid in the month incurred. Packaging costs are paid two months after they are incurred. These costs will be RM2.000 in May 2021and are expected to be the same in June 2021. A bank overdraft of RM310,000 is expected on 1 July 2021. The bank charges interest of 1% per monthfor the overdraft, calculated on the closing balance each month, and payable the following n Loan repayments refer to a bank loan which is interest free until January 2022. The business has no depreciable fixed assets. Required:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Mahsuri Berhad sells high quality chocolates and flowers which it buys in bulk, packages and distributes tocustomers. The following is a table of estimated revenues and costs for the period July 2021 to
December2021. Other costs are included in the notes below:
July
Aug
Sept
Oct
Nov
Dec
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Sales of chocolatesand flowers
500
532
564
612
640
660
Purchases ofchocolates andflowers
250
266
282
306
320
330
Administrationexpenses
110
120
124
130
136
140
Packaging costs
6
Miscellaneousexpenses
12
12
14
14
16
16
Loan repayments
100
100
Notes:
Stocks of chocolates and flowers (at cost) are estimated at RM500,000 at 1 July 2021 and RM340,000 at31 December 2021.
Suppliers allow one month's credit. Purchases in June 2021 will total RM120,000.
30% of sales are paid for in the month of sale. The remainder are paid for in the month following themonth of sale. June 2021 sales are expected to be RM280,000.
Delivery costs are 1% of sales revenue each month, paid in the month in which they are incurred. Administration and miscellaneous expenses are also paid in the month incurred.
Packaging costs are paid two months after they are incurred. These costs will be RM2.000 in May 2021and are expected to be the same in June 2021.
A bank overdraft of RM310,000 is expected on 1 July 2021. The bank charges interest of 1% per monthfor the overdraft, calculated on the closing balance each month and payable the following month.
Loan repayments refer to a bank loan which is interest free until January 2022.
The business has no depreciable fixed assets.
Required:
Making all calculations to the nearest RM'000, prepare for Mahsuri Berhad, a monthly cash budget, in columnar form, for each of the five months to 30 November 2021,
showing the cash balance at the end of each month.
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