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Tutorial Question On Cash Budget

The document provides sales projections and other financial information for Haryana Jaya for the purpose of preparing a cash budget for the second quarter of 2017. It includes projected monthly sales from January to August, information on cash collection periods, raw material purchases, operating expenses, interest and dividend payments, planned capital expenditures, and beginning cash balance requirements.

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zulkafli muhammad zulhilmi
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363 views1 page

Tutorial Question On Cash Budget

The document provides sales projections and other financial information for Haryana Jaya for the purpose of preparing a cash budget for the second quarter of 2017. It includes projected monthly sales from January to August, information on cash collection periods, raw material purchases, operating expenses, interest and dividend payments, planned capital expenditures, and beginning cash balance requirements.

Uploaded by

zulkafli muhammad zulhilmi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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TUTORIAL QUESTIONS ON CASH BUDGET

Below is the information for Haryana Jaya:

a) Haryana Jayas projected sales for the first eight months of 2017 are as follows:

January 90,000 May 300,000


February 120,000 June 270,000
March 135,000 July 225,000
April 240,000 August 150,000

10% of sales is for cash, another 60% is collected in the following month and 30% is
collected in the second month following sales.

b) Haryana Jaya purchases raw materials one month before its sales. Amount of raw
materials needed is 50% of its sales. 50% of the purchases are paid in the month of
purchase and the balance is paid one month after the purchase.

c) The company pays RM10,000 per month for renting purposes, RM25,000 for salaries and
RM20,000 each month for other expenditures. Depreciation is fixed at RM5,000 per
month.

d) Annual interest of RM30,000 is to be paid in May, June and July.

e) A new machine worth RM110,000 will be purchased in June in order to replace the
existing machine.

f) The firm will receive dividend of RM40,000 from its investment beginning of each
quarter.

g) The firms cash balance on 31st March is RM10,000 and a minimum balance of
RM10,000 is to be maintained at all times.

Prepare a cash budget covering the second quarter of 2017.

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