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Exercise 6: Luna Ple is preparing the cash budget the year 20X0. The following table characterises the cash inflows and outflows of the business. (unit of measure: Smil) 1" Quarter 2d Quarter 3d Quarter 4th Quarter 20X0 Cash inflow from sales budget 240 280 460 500 1,480 Cash outflow from direct material budget 120 140 230 250 740 Cash outflow from direct labour budget 32 48 80 80 240 Cash outflow from overheads cost budget 62 78 110 110 360 Cash outflow from sales and admin cost budget 58 62 70 70 260 Besides the above cash flows, the expected cooperation income tax is $20mil per quarter and an amount of $40mil dividend would be paid out to shareholders at 4th quarter. The opening balance of cash for the year is $320mil. The management wish to maintain the minimum cash reserve $300mil per quarter. Prepare the cash budget for the year 20X0 given that in case of borrowing to maintain the cash reserve level, an interest of 12% per year annum is applied. The amount of borrowing would be released at the last day of each quarter. The reimbursement is expected at the year end.

Exercise 6: Luna Ple is preparing the cash budget the year 20X0. The following table characterises the cash inflows and outflows of the business. (unit of measure: Smil) 1" Quarter 2d Quarter 3d Quarter 4th Quarter 20X0 Cash inflow from sales budget 240 280 460 500 1,480 Cash outflow from direct material budget 120 140 230 250 740 Cash outflow from direct labour budget 32 48 80 80 240 Cash outflow from overheads cost budget 62 78 110 110 360 Cash outflow from sales and admin cost budget 58 62 70 70 260 Besides the above cash flows, the expected cooperation income tax is $20mil per quarter and an amount of $40mil dividend would be paid out to shareholders at 4th quarter. The opening balance of cash for the year is $320mil. The management wish to maintain the minimum cash reserve $300mil per quarter. Prepare the cash budget for the year 20X0 given that in case of borrowing to maintain the cash reserve level, an interest of 12% per year annum is applied. The amount of borrowing would be released at the last day of each quarter. The reimbursement is expected at the year end.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 6: Luna Ple is preparing the cash budget the year 20X0. The following table characterises the cash inflows and outflows of the business. (unit of measure: Smil) 1 Quarter 2nd Quarter 3rd Quarter 4th Quarter 20X0 Cash inflow from sales budget 240 280 460 500 1,480 Cash outflow from direct material budget 120 140 230 250 740 Cash outflow from direct labour budget 32 48 80 80 240 Cash outflow from overheads cost budget 62 78 110 110 360 Cash outflow from sales and admin cost budget 58 62 70 70 260 Besides the above cash flows, the expected cooperation income tax is $20mil per quarter and an amount of $40mil dividend would be paid out to shareholders at 4th quarter. The opening balance of cash for the year is $320mil. The management wish to maintain the minimum cash reserve $300mil per quarter. Prepare the cash budget for the year 20X0 given that in case of borrowing to maintain the cash reserve level, an interest of 12% per year annum is applied. The amount of borrowing would be released at the last day of each quarter. The reimbursement is expected at the year end.
Transcribed Image Text:Exercise 6: Luna Ple is preparing the cash budget the year 20X0. The following table characterises the cash inflows and outflows of the business. (unit of measure: Smil) 1 Quarter 2nd Quarter 3rd Quarter 4th Quarter 20X0 Cash inflow from sales budget 240 280 460 500 1,480 Cash outflow from direct material budget 120 140 230 250 740 Cash outflow from direct labour budget 32 48 80 80 240 Cash outflow from overheads cost budget 62 78 110 110 360 Cash outflow from sales and admin cost budget 58 62 70 70 260 Besides the above cash flows, the expected cooperation income tax is $20mil per quarter and an amount of $40mil dividend would be paid out to shareholders at 4th quarter. The opening balance of cash for the year is $320mil. The management wish to maintain the minimum cash reserve $300mil per quarter. Prepare the cash budget for the year 20X0 given that in case of borrowing to maintain the cash reserve level, an interest of 12% per year annum is applied. The amount of borrowing would be released at the last day of each quarter. The reimbursement is expected at the year end.
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