QUESTION 1 Below is the information for Clean Bio Sdn. Bhd.: a) Clean Bio's projected sales for the first eight months of 2021 are as follows: 90,000 January February March Мay 300,000 120,000 June 270,000 July August 135,000 225,000 April 240,000 150,000 10% of sales is for cash, another 60% is collected in the following month and 30% is collected in the second month following sales. Clean Bio purchases raw materials one month before its sales. Amount of raw materials needed is 50% of its sales. 50% of the purchases are paid in the month of purchase and the balance is paid one month after the purchase. b) The company pays RM10,000 per month for renting purposes, RM25,000 for salaries and RM20,000 each month for other expenditures. Depreciation is fixed at RM5,000 per month. d) Annual interest of RM30,000 is to be paid equally in May, June and July. e) A new machine worth RM110,000 will be purchased in June in order to replace the existing machine. f) The firm will receive dividend of RM40,000 from its investment beginning of each quarter. g) The firm's cash balance on 31* March is RM10,000 and a minimum balance of RM10,000 is to be maintained at all times. Prepare a cash budget covering the second quarter of 2021.

QUESTION 1 Below is the information for Clean Bio Sdn. Bhd.: a) Clean Bio's projected sales for the first eight months of 2021 are as follows: 90,000 January February March Мay 300,000 120,000 June 270,000 July August 135,000 225,000 April 240,000 150,000 10% of sales is for cash, another 60% is collected in the following month and 30% is collected in the second month following sales. Clean Bio purchases raw materials one month before its sales. Amount of raw materials needed is 50% of its sales. 50% of the purchases are paid in the month of purchase and the balance is paid one month after the purchase. b) The company pays RM10,000 per month for renting purposes, RM25,000 for salaries and RM20,000 each month for other expenditures. Depreciation is fixed at RM5,000 per month. d) Annual interest of RM30,000 is to be paid equally in May, June and July. e) A new machine worth RM110,000 will be purchased in June in order to replace the existing machine. f) The firm will receive dividend of RM40,000 from its investment beginning of each quarter. g) The firm's cash balance on 31* March is RM10,000 and a minimum balance of RM10,000 is to be maintained at all times. Prepare a cash budget covering the second quarter of 2021.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

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