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Amsterdam Sdn. Bhd. has approached its bankers for loan facilities to be made available during...

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Accounting

Amsterdam Sdn. Bhd. has approached its bankers for loan facilities to be made available during the coming quarter. The bank has responded by requesting that a cash budget is prepared before any decision can be taken. The following information has been compiled:

June

RM000

July

RM000

August

RM000

Sales

150

200

100

Purchases

120

60

40

Wage payments

20

22

15

Hire-purchase payments

15

15

15

Cash expenses

20

30

15

Depreciation

5

5

5

Capital items

13

-

-

Trade receivables on 1 June amount to RM 84,000 of which it is estimated RM 78,000 will be collected during the month and RM 4,000 in July. The balance is to be written off as a bad debt. The expected pattern of cash collection from sales is 25% during the month of sale, 70% in the month following sale and 4% in the next month.

On 1 June, the amount owing to trade payables for purchases was RM 90,000. Purchases and capital items are paid for in the month following the month of supply.

Required:

Prepare a cash budget for each of the months of June, July and August. The opening cash balance at 1 June is RM 20,500.

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