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Required: Using the information above, prepare: i. A schedule of collections received from customers. A schedule of payments to suppliers. A Cash Budget. ii.

Required: Using the information above, prepare: i. A schedule of collections received from customers. A schedule of payments to suppliers. A Cash Budget. ii.

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 A. The Rilex and Chill Coffee Shop has requested a cash budget for August. After examining the records of the company, you find the following: 1. Cash balance on 1 August is RM43,280. 2. Actual sales for June and July are as follows: June RM Cash sales Credit sales Total sales 10,200 26,100 36,300 July RM 14,700 33,900 48,600 3. Credit sales are collected over three months: 30% in the month of sales, 40% in the second month, and 25% in the third month. The customers who paid in the month of sales are qualified for 3% discounts on the amount owed. While the sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. 4. Inventory purchases average 80% of a month's total sales. Of those purchases, 60% are paid for in the month of purchase. The remaining 40% is paid for in the following month. 5. Salaries and wages total RM13,800 per month. 6. The company received interest from the fixed deposit accounts of RM30,000 in August. 7. Taxes to be paid in August are RM5,200. ii. 8. During August, an old piece of furniture has been sold for RM3,400 and the new one has been purchased for RM5,200. 9. Rental expenses are RM3,400 per month. 10. The administrative expense for August is RM15,000 including RM1,800 for depreciation. The owner also tells you that he expects cash sales of RM19,800 and credit sales of RM44,800 for August. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. Required: Using the information above, prepare: i. A schedule of collections received from customers. $ A schedule of payments to suppliers. A Cash Budget. (Note: Round up all figures to the nearest integer numbers).
Transcribed Image Text:Question 2 A. The Rilex and Chill Coffee Shop has requested a cash budget for August. After examining the records of the company, you find the following: 1. Cash balance on 1 August is RM43,280. 2. Actual sales for June and July are as follows: June RM Cash sales Credit sales Total sales 10,200 26,100 36,300 July RM 14,700 33,900 48,600 3. Credit sales are collected over three months: 30% in the month of sales, 40% in the second month, and 25% in the third month. The customers who paid in the month of sales are qualified for 3% discounts on the amount owed. While the sales collected in the third month are subject to a 2% late fee, which is paid by those customers in addition to what they owe. The remaining sales are uncollectible. 4. Inventory purchases average 80% of a month's total sales. Of those purchases, 60% are paid for in the month of purchase. The remaining 40% is paid for in the following month. 5. Salaries and wages total RM13,800 per month. 6. The company received interest from the fixed deposit accounts of RM30,000 in August. 7. Taxes to be paid in August are RM5,200. ii. 8. During August, an old piece of furniture has been sold for RM3,400 and the new one has been purchased for RM5,200. 9. Rental expenses are RM3,400 per month. 10. The administrative expense for August is RM15,000 including RM1,800 for depreciation. The owner also tells you that he expects cash sales of RM19,800 and credit sales of RM44,800 for August. No minimum cash balance is required. The owner of the company doesn't have access to short-term loans. Required: Using the information above, prepare: i. A schedule of collections received from customers. $ A schedule of payments to suppliers. A Cash Budget. (Note: Round up all figures to the nearest integer numbers).
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