XYZ sdn bhd estimating its cash requirement for the third quarter year 2011. The company's projected sales are as follows: month sales (rm) march 170,000 april 160,000 may 140,000 june 180,000 july 200,000 august 220,000 september october 195,000 180,000 i) cash sales are 10% of the current month's sales, while 90% of them were sold on credit. 60% of the month's credit sales are paid in the month following the sale, while 30% of it are paid in the second month following the sales. another 10% is bad debt. ii) purchases are 50% of sales and were made one month before sales. iii) payments on accounts are on 30% of current month's purchases plus 70% of the previous month's purchases. iv) wages and salaries amounting to 10% of the preceeding month's sales. v) vi) vii) vii) an 8% semi-annually interest payment on rm 100,000 notes payable is to the paid in July 2011. the company plans to pay rm 6,500 in cash for a brand-new computer in august. a quarterly dividend of rm 10,000 will be paid to ABC corporation in March, June, September and December. the firm's ending balance for June 30, 2011 is rm56,000 and the minimum balance the firm wishes to have for every month is rm 25,000. how to prepare cash budget for XYZ Sdn Bhd for the third quarter of year 2011?

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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Transcribed Image Text:XYZ sdn bhd estimating its cash requirement for the third quarter year 2011. The company's projected sales are as follows: month sales (rm) march 170,000 april 160,000 may 140,000 june 180,000 july 200,000 august 220,000 september 195,000 october 180,000 i) cash sales are 10% of the current month's sales, while 90% of them were sold on credit. 60% of the month's credit sales are paid in the month following the sale, while 30% of it are paid in the second month following the sales. another 10% is bad debt. ii) purchases are 50% of sales and were made one month before sales. iii) payments on accounts are on 30% of current month's purchases plus 70% of the previous month's purchases. iv) wages and salaries amounting to 10% of the preceeding month's sales. v) an 8% semi-annually interest payment on rm 100,000 notes payable is to the paid in July 2011. vi) the company plans to pay rm 6,500 in cash for a brand-new computer in august. vii) a quarterly dividend of rm 10,000 will be paid to ABC corporation in March, June, September and December. vii) the firm's ending balance for June 30, 2011 is rm56,000 and the minimum balance the firm wishes to have for every month is rm 25,000. how to prepare cash budget for XYZ Sdn Bhd for the third quarter of year 2011?

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