QUESTION 2Isa Corporation is estimating its funding needs for the year 2016. The company's actual andforecasted sales are as follows:MonthDecemberJanuaryFebruaryMarchSales (RM)180,000170,000195,000140,000MonthAprilMayJuneJulySales (RM)170,000250,000205,000270,000a) 30 percent of the firm's sales collection is collected in the month of sales, 65 percent iscollected one month after sales and the remainder is considered bad debt.b) Purchases are made one month prior to sales. Purchases of raw materials are 70percent of sales. The suppliers are paid one month after the purchases.c) Operating expenses will be 10 percent of the monthly sales. Other fixed monthlyexpenses for rent, salaries and depreciation are RM13,000, RM20,000 and RM16,000respectively.d) Tax deposit of RM15,000 is made beginning January.e) A quarterly dividend of RM33,000 will be received at the end of each quarter.) Ending cash balance for December 31 2015 is RM70,000 and the minimum balance ofRM30,000 must be maintained at all times.Based on the above information, prepare a cash budget for the four-month period ending on30th April of 2016. QUESTION 2a) Iqbal Hanif Holdings is trying to estimate its cash requirement for the third quarter of2017. The company's forecasted sales are as follows:MonthAprilMayJuneJulySales (RM)80,00085,00090,000100,000MonthAugustSeptemberOctoberSales (RM)125,000105,000130,000b) The company makes 50 percent cash sales, 40 percent is collected one month aftersales, 5 percent is collected two months after sales and 5 percent is uncollected.c) Purchases of raw materials are 70 percent of sales and are made one month before thesales occur. Payment is made equally in the two months after purchases.d) Operating expenses will be 10 percent of the monthly sales. The company fixed monthlyexpenses are: RM 20,000 for wages, RM 3,000 for rent, RM13,000 for depreciation andRM 2,000 for insurance.e) A quarterly dividend of RM4,000 will be received at the end of each quarter.f) A7 percent semi-annually interest payment on RM100,000 note payable is paid in July.g) Ending cash balance for June 30h 2017 is RM55.000 and the minimum balance ofRM30,000 must be maintained at all times. Any short term financing needed if any,should be paid off in the month following the month of financing with an annual interestrate of 10 percent per annum.Based on the above information, prepare a cash budget for the third quarter period endingon 30th September 2017.

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QUESTION 2 Isa Corporation is estimating its funding needs for the year 2016. The company's actual and forecasted sales are as follows: Month December January February March Sales (RM) 180,000 170,000 195,000 140,000 Month April May June | July Sales (RM) 170,000 250,000 |205,000 270,000 a) 30 percent of the firm's sales collection is collected in the month of sales, 65 percent is collected one month after sales and the remainder is considered bad debt. b) Purchases are made one month prior to sales. Purchases of raw materials are 70 percent of sales. The suppliers are paid one month after the purchases. c) Operating expenses will be 10 percent of the monthly sales. Other fixed monthly expenses for rent, salaries and depreciation are RM13,000, RM20,000 and RM16,000 respectively. d) Tax deposit of RM15,000 is made beginning January. e) A quarterly dividend of RM33,000 will be received at the end of each quarter. ) Ending cash balance for December 31“ 2015 is RM70,000 and the minimum balance of RM30,000 must be maintained at all times. Based on the above information, prepare a cash budget for the four-month period ending on

QUESTION 2 Isa Corporation is estimating its funding needs for the year 2016. The company's actual and forecasted sales are as follows: Month December January February March Sales (RM) 180,000 170,000 195,000 140,000 Month April May June | July Sales (RM) 170,000 250,000 |205,000 270,000 a) 30 percent of the firm's sales collection is collected in the month of sales, 65 percent is collected one month after sales and the remainder is considered bad debt. b) Purchases are made one month prior to sales. Purchases of raw materials are 70 percent of sales. The suppliers are paid one month after the purchases. c) Operating expenses will be 10 percent of the monthly sales. Other fixed monthly expenses for rent, salaries and depreciation are RM13,000, RM20,000 and RM16,000 respectively. d) Tax deposit of RM15,000 is made beginning January. e) A quarterly dividend of RM33,000 will be received at the end of each quarter. ) Ending cash balance for December 31“ 2015 is RM70,000 and the minimum balance of RM30,000 must be maintained at all times. Based on the above information, prepare a cash budget for the four-month period ending on

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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