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Cash Budget Exercises

The document provides information to prepare a cash budget for Cookie Bhd for July, August, and September 2019. It includes projected monthly sales, the percentage of sales that are cash and credit, monthly expenses like purchases, rent, administrative costs, and beginning cash balances. It then shows the calculated cash budgets for each month, including cash receipts from sales, cash disbursements for expenses, the net change in cash, and ending cash balances. Additional financing may be needed if the ending balance falls below the minimum required.

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2K views9 pages

Cash Budget Exercises

The document provides information to prepare a cash budget for Cookie Bhd for July, August, and September 2019. It includes projected monthly sales, the percentage of sales that are cash and credit, monthly expenses like purchases, rent, administrative costs, and beginning cash balances. It then shows the calculated cash budgets for each month, including cash receipts from sales, cash disbursements for expenses, the net change in cash, and ending cash balances. Additional financing may be needed if the ending balance falls below the minimum required.

Uploaded by

otaku hime
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CASH BUDGET EXERCISES

EXERCISE
You are required to prepare a cash budget for the Cookie Bhd for the month
of July, August and September 2019.
 The amount of sales on June is RM120,000
 The projected sales for the month of July, August and September are
RM130,000, RM160,000 and RM140,000 respectively
 The company has observed that 75% of its sales are for cash and 25% of its
sales are collected in the following month
 Purchases are 60% of the monthly sales and paid in cash
 Rent are RM10,000 per month and general administrative expenses are
RM20,000 per month
 The company plan to give bonus of RM50,000 in October, 2019
 Tax repayment of RM25,000 are made in July, 2019
 The interest on the accumulated loan is 11% per annum
 The beginning balance on July, 2019 is RM1,000 and the company must
maintain a minimum cash balance of RM6,000 each month
July Aug Sept
Sales: 120,000 (June) 130,000 160,000 140,000
75% pay in cash 97,500 120,000 105,000
25% pay 1 month later 30,000 32,500 40,000
127,500 152,500 145,000

TOTAL CASH RECEIPTS: 127,500 152,500 145,000


July Aug Sept
Cash Disbursements:
Purchases payment (60% x sales) (78,000) (96,000) (84,000)
Rent (10,000) (10,000) (10,000)
General administration expenses (20,000) (20,000) (20,000)
Tax (25,000) - -
TOTAL CASH DISBURSEMENTS (133,000) (126,000) (114,000)

NET CHANGE IN CASH (5,500) 26,500 31,000


Beginning balance 1,000 6,000 21,904
Interest (11% p.a.) 0 (96)** 0
Additional financing 10,500* 0 0
Financing repayment 0 (10,500) 0
Ending balance 6,000 21,904 52,904

Accumulated loan 10,500 0 0


*Additional financing = minimum cash balance - net
change in cash – beginning
balance
= 6,000 - (5,500) – 1,000
= 10,500

** Interest = (11% x accumulated loan)/ 12


= 96
EXERCISE
The followings are the projected sales and purchases of TT Bhd for the
month
of March, April and May of 2019.
Sales Purchases
MARCH RM200,000 RM150,000
APRIL RM155,000 RM130,000
MAY RM170,000 RM140,000
 The amount of sales and purchase on February is RM150,000 and
RM130,000 respectively
 The monthly sales and purchases are paid in the following month
 The company pays RM10,000 per month for wages and RM4,000 each
month for administrative expenses
 Depreciation expenses is RM5,000 per month
 Tax repayment of RM9,000 are made in March
 The cash balance on February is RM6,000 and the minimum balance the
company wants to maintain is RM9,000 each month
 Interest on accumulated loan is 12% per annum
March April May
Sales: 150,000 (Feb) 200,000 155,000 170,000
100% pay 1 month later 150,000 200,000 155,000

Purchases: 130,000 (Feb) 150,000 130,000 140,000


100% pay 1 month later 130,000 150,000 130,000

TOTAL CASH RECEIPTS: 150,000 200,000 155,000

Cash Disbursements:
Purchases payment 130,000 150,000 130,000
Wages 10,000 10,000 10,000
Administration expenses 4,000 4,000 4,000
Tax 9,000 - -
TOTAL CASH DISBURSEMENTS (153,000) (164,000) (144,000)
March April May
NET CHANGE IN CASH (3,000) 36,000 11,000
Beginning balance 6,000 9,000 38,940
Interest (12% p.a.) 0 (60)** 0
Additional financing 6,000* 0 0
Financing repayment 0 (6,000) 0
Ending balance 9,000 38,940 49,940

Accumulated loan 6,000 0 0


*Additional financing = minimum cash balance - net
change in cash – beginning
balance
= 9,000 – (3,000) – 6,000
= 6,000

** Interest = (12% x accumulated loan)/ 12


= 60

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