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Question 2 - After considering factors such as lower profit and poor cash flow controls in the first quarter, the management of Batik Airlines is considering preparing a cash budget for the second quarter. Given below is the operational budget for Batik Airlines merchandise from January to June 2024. January February March April May June Sales (unit) 4,100 3,900 3,300 3,600 3,700 3,800 Purchases (RM) 62,000 30,000 40,000 46,000 56,000 42,000 Wages (RM) 30,000 31,000 28,000 32,000 30,000 30,000 Overhead (RM): Production 10,000 12,500 11,250 15,000 16,000 9,400 Administration 6,000 7,500 6,750 9,000 8,400 6,800 Selling 2,000 2,500 2,250 3,000 4,600 2,600 Additional information: a) Selling price is RM5 per unit. 10% of the sales are cash sales and is entitled to a 5% cash discount. The remaining sales are credit sales. b) 50% of the debtors will pay at the end of the month of sales and is entitled to a 5% cash discount, another 45% of the debtors will pay the next month following the sales and the remaining will be uncollectible. c) All purchases are on credit and the payment to creditors will be as follows: 50% in the month following the purchases and the balance will be paid two months after the purchases. d) 75% of wages paid in the month incurred while the balance will be paid on the first week of the following month. e) The production overhead costs are inclusive of depreciation on machinery amounted to RM2,400 per month and are settled in the month incurred. While other overhead costs will be paid one month in arrears. f) The balance at the bank as at 31 March 2024 is an overdraft of RM10,000. Required: Prepare the cash budget for Batik Airlines for the second quarter of the year 2024. Show the relevant workings.

Question 2 - After considering factors such as lower profit and poor cash flow controls in the first quarter, the management of Batik Airlines is considering preparing a cash budget for the second quarter. Given below is the operational budget for Batik Airlines merchandise from January to June 2024. January February March April May June Sales (unit) 4,100 3,900 3,300 3,600 3,700 3,800 Purchases (RM) 62,000 30,000 40,000 46,000 56,000 42,000 Wages (RM) 30,000 31,000 28,000 32,000 30,000 30,000 Overhead (RM): Production 10,000 12,500 11,250 15,000 16,000 9,400 Administration 6,000 7,500 6,750 9,000 8,400 6,800 Selling 2,000 2,500 2,250 3,000 4,600 2,600 Additional information: a) Selling price is RM5 per unit. 10% of the sales are cash sales and is entitled to a 5% cash discount. The remaining sales are credit sales. b) 50% of the debtors will pay at the end of the month of sales and is entitled to a 5% cash discount, another 45% of the debtors will pay the next month following the sales and the remaining will be uncollectible. c) All purchases are on credit and the payment to creditors will be as follows: 50% in the month following the purchases and the balance will be paid two months after the purchases. d) 75% of wages paid in the month incurred while the balance will be paid on the first week of the following month. e) The production overhead costs are inclusive of depreciation on machinery amounted to RM2,400 per month and are settled in the month incurred. While other overhead costs will be paid one month in arrears. f) The balance at the bank as at 31 March 2024 is an overdraft of RM10,000. Required: Prepare the cash budget for Batik Airlines for the second quarter of the year 2024. Show the relevant workings.

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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Question 2 - After considering factors such as lower profit and poor cash flow controls in the first quarter, the management of Batik Airlines is considering preparing a cash budget for the second quarter. Given below is the operational budget for Batik Airlines merchandise from January to June 2024. January February March April May June Sales (unit) 4,100 3,900 3,300 3,600 3,700 3,800 Purchases (RM) 62,000 30,000 40,000 46,000 56,000 42,000 Wages (RM) 30,000 31,000 28,000 32,000 30,000 30,000 Overhead (RM): Production 10,000 12,500 11,250 15,000 16,000 9,400 Administration 6,000 7,500 6,750 9,000 8,400 6,800 Selling 2,000 2,500 2,250 3,000 4,600 2,600 Additional information: a) Selling price is RM5 per unit. 10% of the sales are cash sales and is entitled to a 5% cash discount. The remaining sales are credit sales. b) 50% of the debtors will pay at the end of the month of sales and is entitled to a 5% cash discount, another 45% of the debtors will pay the next month following the sales and the remaining will be uncollectible. c) All purchases are on credit and the payment to creditors will be as follows: 50% in the month following the purchases and the balance will be paid two months after the purchases. d) 75% of wages paid in the month incurred while the balance will be paid on the first week of the following month. e) The production overhead costs are inclusive of depreciation on machinery amounted to RM2,400 per month and are settled in the month incurred. While other overhead costs will be paid one month in arrears. f) The balance at the bank as at 31 March 2024 is an overdraft of RM10,000. Required: Prepare the cash budget for Batik Airlines for the second quarter of the year 2024. Show the relevant workings.
Transcribed Image Text:Question 2 - After considering factors such as lower profit and poor cash flow controls in the first quarter, the management of Batik Airlines is considering preparing a cash budget for the second quarter. Given below is the operational budget for Batik Airlines merchandise from January to June 2024. January February March April May June Sales (unit) 4,100 3,900 3,300 3,600 3,700 3,800 Purchases (RM) 62,000 30,000 40,000 46,000 56,000 42,000 Wages (RM) 30,000 31,000 28,000 32,000 30,000 30,000 Overhead (RM): Production 10,000 12,500 11,250 15,000 16,000 9,400 Administration 6,000 7,500 6,750 9,000 8,400 6,800 Selling 2,000 2,500 2,250 3,000 4,600 2,600 Additional information: a) Selling price is RM5 per unit. 10% of the sales are cash sales and is entitled to a 5% cash discount. The remaining sales are credit sales. b) 50% of the debtors will pay at the end of the month of sales and is entitled to a 5% cash discount, another 45% of the debtors will pay the next month following the sales and the remaining will be uncollectible. c) All purchases are on credit and the payment to creditors will be as follows: 50% in the month following the purchases and the balance will be paid two months after the purchases. d) 75% of wages paid in the month incurred while the balance will be paid on the first week of the following month. e) The production overhead costs are inclusive of depreciation on machinery amounted to RM2,400 per month and are settled in the month incurred. While other overhead costs will be paid one month in arrears. f) The balance at the bank as at 31 March 2024 is an overdraft of RM10,000. Required: Prepare the cash budget for Batik Airlines for the second quarter of the year 2024. Show the relevant workings.
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