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Homework answers / question archive / a) The Kilau Corporation's projected sales for first and second quarter of 2021 are shown below: Projected Sales for January until June 2021 January RM90,000
a) The Kilau Corporation's projected sales for first and second quarter of 2021 are shown below:
Projected Sales for January until June 2021
January RM90,000.00 April RM85,000.00
February RM80,000.00 May RM90,000.00
March RM95,000.00 June RM95,000.00
November and December sales for 2020 were RM75,000.00 and RM85,000.00 respectively.
i. 30 percent of sales are collected in cash. The remaining balances are on credit and will be collected equally over the next two (2) months after sales.
ii. Purchases of raw materials are made one month in advance of its sales. The purchases are equal to 70 percent of sales. Full payment will be paid in the following month after the purchase. For example, purchases for October sales are made in September, and payment is made in October.
iii. The company incurs the following expenditures; salaries and wages RM30,000.00 per month, rental RM8,000.00 per month, and other expenditures RM15,000.00 at the beginning of each quarter.
iv. In addition, utilities will be 1.5 percent of monthly sales, and depreciation is fixed at RM5,000.00 per month.
v. Ending cash balance for December 2020 is RM90,000.00 and the company also intended to maintain a minimum cash balance of RM35,000.00 every month.
REQUIRED:
Prepare cash budget for the first quarter of 2021 (January, February, Mac)