Setia Sdn Bhd had cash of RM13,000 on hand together with trade debtors' outstanding balance of RM55,000 as of January 1. During the year, the company expected the following sales to customers by quarter, with collection terms of 50% in cash and 50% in credit receivable in the next quarter: first second third fourth Sales 110,000 245,000 122,400 149,600 Direct materials purchases in metric tons (MT) costing RM 50.00 per MT payable in the a same quarter is as follows: first second third fourth Direct Material Purchases 1,300 1,500 1,100 1,000 The production budget showed the following unit production by quarter with an average labor wage rate of RM40.00 payable in the same quarter: first second third fourth unit to be produced 1,500 2,000 1,700 1,500 Setia Sdn Bhd planned to pay dividends of RM10,000 per quarter during the year. In July, a new equipment costing RM60,000 will be purchased. An additional cost of RM16,000 was planned for its installation during the fourth quarter. The company was required to maintain a minimum cash balance of RM15,000. A line of credit was available for short-term borrowings in increments of RM1,000. All borrowings will be made at the beginning of a quarter and repaid at the end of the quarter. Interest on the short-term borrowings will be paid at 0.5% per quarter on the amount repaid in any quarter when a loan repayment is made. All other interest expense will be accrued each quarter. (a) Prepare a cash budget for Setia Sdn Bhd by quarter and for the year in total.
Setia Sdn Bhd had cash of RM13,000 on hand together with trade debtors' outstanding
balance of RM55,000 as of January 1. During the year, the company expected the
following sales to customers by quarter, with collection terms of 50% in cash and 50% in
credit receivable in the next quarter:
| first | second | third | fourth | |
| Sales | 110,000 | 245,000 | 122,400 | 149,600 |
Direct materials purchases in metric tons (MT) costing RM 50.00 per MT payable in the
a same quarter is as follows:
| first | second | third | fourth | |
| Direct Material Purchases | 1,300 | 1,500 | 1,100 | 1,000 |
The production budget showed the following unit production by quarter with an average
labor wage rate of RM40.00 payable in the same quarter:
| first | second | third | fourth | |
| unit to be produced | 1,500 | 2,000 | 1,700 | 1,500 |
Setia Sdn Bhd planned to pay dividends of RM10,000 per quarter during the year. In
July, a new equipment costing RM60,000 will be purchased. An additional cost of
RM16,000 was planned for its installation during the fourth quarter.
The company was required to maintain a minimum cash balance of RM15,000. A line of
credit was available for short-term borrowings in increments of RM1,000. All
borrowings will be made at the beginning of a quarter and repaid at the end of the
quarter. Interest on the short-term borrowings will be paid at 0.5% per quarter on the
amount repaid in any quarter when a loan repayment is made. All other interest expense
will be accrued each quarter.
(a) Prepare a
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