On behalf of Razali, prepare a cash budget for the three months ending 31 March 2020.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Question 4
Razali intends to run a laundry shop on 1 January 2020 with an initial capital of RM32,480 consisting
of:
RM
Cash in bank
1 980
Cash in hand
500
Machine
30,000
Razali plans to apply for a loan of RM12,000 in February 2020 at an interest rate of 8% per annum.
The loan will be repaid monthly for 4 years, starting the following month.
The estimated receipts and payments for his business are as follows:
i) Revenue from laundry services for January 2020nwas RM8,900. This revenue is expected to
increase 10% each month from the following month.
ii) The total purchase of detergents by month is as follows:
RM
1,500
January
February
1,800
March
2,160
60% of the purchase of detergent will be paid in cash and the balance will be paid in the following
month.
iii) The monthly rent is RM1,200.
iv) Utility budget:
RM
January
February
860
970
March
1,120
v) The business plans to buy five units of dryers and two units of washing machines at a total cost of
RM40,000 in March. An advance payment of 60% will be made and the balance paid in full in the
following month.
Required:
On behalf of Razali, prepare a cash budget for the three months ending 31 March 2020.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd064ae55-c670-4650-8982-773b2cc1ef33%2F39067f95-948c-4701-9936-1505fbe0eea5%2Fvv5f6fw_processed.jpeg&w=3840&q=75)
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