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The CEO of MGT Manufacturing was presented with the cash budget for 2021. She was not happy with the budget as it showed a negative cash balance at the end of March and June. She has inquired from CIMB Bank for a loan. The bank has agreed to provide a short-term loan of 9 months with an interest rate of 6%. The CEO has requested you to prepare a new cash budget in consideration of the loan facility from the bank. She also has instructed that cash balance at any time should not be tess than RM25,000.

Based on the above information prepare a new Cash Budget, Income Statement and Balance Sheet. (Total: 30 Marks)

CASH BUDGET March June September December Annual

Cash Balance Beginning 32,500 - 34,350 - 30,100 600 32,500

ADD: Receipts 450,000 500,000 500,000 500,000

Total Cash Available 482,500 465,650 469,900 500,600

Less Disbursements 516,850 495,750 469,300 451,100

Excess (Deficits) of Cash -34,350 -30,100 600 49,500 49,500

Financing

Borrowing in the quarter

Repayment of Borrowin s

Interest

Total Financing

Cash Balance Ending - 34,350 - 30,100 600 49,500 49,500

INCOME STATEMENT 2021

Sales - 2000000

Cost of Goods Sold - 1300000

Gross Margin 700,000

Selling and Administration Expense 576,000

Net Operating Income 124,000

Interest Expense

Net Income 124,000

Previous Retain Earnings 449,900

Add: Net Income 124,000

Less: Dividends 20,000

New Retain Earnings 553,900

BALANCE SHEET 2021

Current Assets

Cash 49,500

Account Receivables 150,000

Raw Materials 6,900

Inventories 39,000

Total Current Assets 245,400

Land 80,000

Plant and Machines 830,000

Less: Accumulated Depreciation 392,000

Plant and Machines Net 438,000

TOTAL ASSETS 763,400

Current Liabilities

Accounts Payable 34,500

Total Current Liabilities 34,500

Stockholders' Equity

Common Stock 175,000

Retained Earnings 553,900

Total Equity 728,900

TOTAL LIABILITIES AND EQUITY 763,400

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