The GoGo Sdn Bhd (GSB) and its subunits must prepare budgets yearly. One of GSB subunits is Era Enterprise (EE), a functioning producer food container and famous for its Bento Box. Assume that EE prepares monthly cash budgets. Relevant data from assumed operating budgets for 2018 are as follows: January February Sales 460,000 412,000 Direct materials purchases 185,000 210,000 Direct labour 70,000 85,000 65,000 Manufacturing overhead Selling and administrative expenses 85,000 50,000 95,000 EE sells its Bento Box in shop located in Klang Valley. Collections are expected to be 75% in the month of sale and 25% in the month following sale. EE pays 60% of direct materials purchases in cash in the month of purchase, and the balance due in the month following the purchase. All other items above are paid in the month incurred. Additional information: i. Sales: December 2017 was RM320,000 ii. Purchases of direct materials: December 2017 was RM175,000 i. Other receipts: January – Commission received RM2,000. February – Sale of used equipment RM4,000 iv. Other disbursement: February – Purchased equipment RM10,000 V. Repaid debt: January RM30,000. The company's cash balance on January 1, 2018 is expected to be RM50,000. The company wants to maintain a minimum cash balance of RM45,000. Required: a) Prepare schedule of collections from customer for January and February 2018. b) Prepare schedule of payments for January and February 2018. c) Prepare a cash budget for January and February 2018.
The GoGo Sdn Bhd (GSB) and its subunits must prepare budgets yearly. One of GSB subunits is Era Enterprise (EE), a functioning producer food container and famous for its Bento Box. Assume that EE prepares monthly cash budgets. Relevant data from assumed operating budgets for 2018 are as follows: January February Sales 460,000 412,000 Direct materials purchases 185,000 210,000 Direct labour 70,000 85,000 65,000 Manufacturing overhead Selling and administrative expenses 85,000 50,000 95,000 EE sells its Bento Box in shop located in Klang Valley. Collections are expected to be 75% in the month of sale and 25% in the month following sale. EE pays 60% of direct materials purchases in cash in the month of purchase, and the balance due in the month following the purchase. All other items above are paid in the month incurred. Additional information: i. Sales: December 2017 was RM320,000 ii. Purchases of direct materials: December 2017 was RM175,000 i. Other receipts: January – Commission received RM2,000. February – Sale of used equipment RM4,000 iv. Other disbursement: February – Purchased equipment RM10,000 V. Repaid debt: January RM30,000. The company's cash balance on January 1, 2018 is expected to be RM50,000. The company wants to maintain a minimum cash balance of RM45,000. Required: a) Prepare schedule of collections from customer for January and February 2018. b) Prepare schedule of payments for January and February 2018. c) Prepare a cash budget for January and February 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The GoGo Sdn Bhd (GSB) and its subunits must prepare budgets yearly. One of GSB subunits
is Era Enterprise (EE), a functioning producer food container and famous for its Bento Box.
Assume that EE prepares monthly cash budgets. Relevant data from assumed operating
budgets for 2018 are as follows:
January
February
Sales
460,000
412,000
Direct materials purchases
185,000
210,000
Direct labour
70,000
85,000
65,000
Manufacturing overhead
Selling and administrative expenses 85,000
50,000
95,000
EE sells its Bento Box in shop located in Klang Valley. Collections are expected to be 75% in
the month of sale and 25% in the month following sale. EE pays 60% of direct materials
purchases in cash in the month of purchase, and the balance due in the month following the
purchase. All other items above are paid in the month incurred.
Additional information:
i. Sales: December 2017 was RM320,000
ii. Purchases of direct materials: December 2017 was RM175,000
i. Other receipts: January – Commission received RM2,000.
February – Sale of used equipment RM4,000
iv. Other disbursement: February – Purchased equipment RM10,000
V.
Repaid debt: January RM30,000.
The company's cash balance on January 1, 2018 is expected to be RM50,000. The company
wants to maintain a minimum cash balance of RM45,000.
Required:
a) Prepare schedule of collections from customer for January and February 2018.
b) Prepare schedule of payments for January and February 2018.
c) Prepare a cash budget for January and February 2018.
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