MEIMEI company. It will begin operations on July 1, 2009. The following estimates have been prepared:Sales - cashJuly (RM) = 5,400August (RM) = 9,720September (RM) = 12,000 Sales - creditJuly (RM) = 12,600August (RM) = 22,680September (RM) = 28,000Purchases – cashJuly (RM) = 2,000August (RM) =3,000September (RM) = 4,000Purchases - creditJuly (RM) = 15,000August (RM) = 16,000September (RM) = 17,000 30% of credit sales are paid in the month of sale, the balance is payable in the month following sale.The initial cash contributions are RM20,000.Fixed overheads are expected to be RM5,000 per month, including RM1,000 depreciation. 50% of the overheads are paid in the month incurred and the balance are paid in the following month.You are to require to:(a) Prepare a monthly cash budget, in columnar form, showing the bank balance at the end of each month, for July, August and September 2009.

Cash budget is one of an important budget type for all kind of organization either it is small or…

Answered: MEIMEI company. It will begin…

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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MEIMEI company. It will begin operations on July 1, 2009. The following estimates have been prepared:

Sales - cash

July (RM) = 5,400
August (RM) = 9,720
September (RM) = 12,000

Sales - credit

July (RM) = 12,600
August (RM) = 22,680
September (RM) = 28,000

Purchases – cash

July (RM) = 2,000
August (RM) =3,000
September (RM) = 4,000

Purchases - credit

July (RM) = 15,000
August (RM) = 16,000
September (RM) = 17,000

30% of credit sales are paid in the month of sale, the balance is payable in the month following sale.
The initial cash contributions are RM20,000.
Fixed overheads are expected to be RM5,000 per month, including RM1,000 depreciation. 50% of the overheads are paid in the month incurred and the balance are paid in the following month.

You are to require to:

(a) Prepare a monthly cash budget, in columnar form, showing the bank balance at the

end of each month, for July, August and September 2009.

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