Key Word for cash Budget (BEFORE, AFTER, IN, ADVANCE)

1. Purchase of raw material which is made one month in advance is predict at 60% of total sales
1. contoh kalau nak cari purchases untuk bulan may kena darab dgn bulan june punya sale untuk dapat
2. The supplier allows payment of 60 percent of purchase value one (1) month after purchase and the balance to be
paid two (2) months after of purchases
1. Maksudnya kita bayar benda tu 1 bulan lepas pembelian
3. Raw material equals 70 percent of total sales and they are purchased on credit two months before the anticipated
sales.
1. Cth kita nak cari purchases for bulan 4 jadi kita kena darab 70% sale bulan 6 baru kita dapat purchases untuk bulan
4
4. Purchases of raw materials are 70 percent of sales and are made two months prior to sales. Payments are as
follows:
1. Sama juga dgn before
(June 2019) PART B Question 1

1. The following is the forecasted sales of MCMC Company for the year 2019.

Month Total Sales in RM

April

May

June

Jul

August

Septembe
r

October

November

December

1. The cash sales are 20 percent of the current total sale of a month. For credit sales, 40 percent will be collected in
the following month and another 60 percent after two months.

2. The purchase of raw material which is made one month in advance is predicte44un d at 60 percent of total sales.
The payment is made equally within two (2) months after the purchase.

3. The taxation cost is RM20,000 and its payment will be made in July.

4. The purchase of a new asset costing of RMI 50,000 will be made in the month of August.

5. The opening cash balance of the company in July is RMIOO, OOO. The cash balance that the company intends to
hold every month is RM850,000.

6. The interest rate of 10 percent per year is chargeable if the company secures a bank loan.

1. Prepare the cash budget for MCMC Company for the third quarter of 2019.
 MMC Company

Cash Budget for Third Quarter of 2019

April May June July August September

Sale 4 000 000 5 000 000 7 000 000 6 000 000 5 000 000 7 000 000
Cash Inflow
1. Cash sale 20 % 800 000 1 000 000 1 400 000 1 200 000 1 000 000 1 400 000
2. Credit sale (sale-cash
sale) 3 200 000 4 000 000 5 600 000 4 800 000 4 000 000 5 600 000
3. Credit Sale (40% 1
months after) 1 230 000 1 600 000 2 240 000 1 920 000 1 600 000

4. Credit Sale (60% 2-

month After) 1 920 000 2 400 000 3 360 000 2 880 000

1. Total Cash Inflow

(1+3+4) 800 000 2 230 000 4 920 000 5 840 000 6 280 000 5 880 000
Cash Outflow
1. Purchases ( 60% 1
month an advance) 3 000 000 4 200 000 3 600 000 3 000 000 4 200 000 3 000 000

2. Payment (50% 1 months

after) 1 500 000 2 100 000 1 800 000 1 500 000 2 100 000

3. Payment (50% 2 months

after) 1 500 000 2 100 000 1 800 000 1 500 000

4. Taxation 20 000

5. New Asset 150 000

2. Total Cash Outflow
(b+c+d+e) 3 920 000 3 450 000 3 600 000
Cash Reconciliations

Net Cash Flow (A-B) 1 920 000 2 830 000 2 280 000
+ Beginning Balance 100 000 2 020 000 4 850 000

Ending Balance 2 020 000 4 850 000 7 130 000

- Minimum Balance 850 000 850 000 850 000

Surplus 1 170 000 4 000 000 6 280 000

PART B QUESTION 2 (June 2018)

1. Given below are the sales and purchases of Zahra and Fatimah Company.

Month Sales RM) Purchases (RM)

April 410,000 120,000

May 450,000 150,000

June 470,000 140,000

Jul 460,000 100,000

August 440,000 80,000

September 480,000 110,000

The company makes 20 percent of sales for cash, another 40 percent is collected in the month following sales, while the
remaining is collected 2 months after sales. Other cash inflows are expected to be RM12,000 in May, RM15,000 in July and
RM27,000 in September. The firm pays cash of 10 percent for its purchases and the remaining of 50 percent will be paid in
the following month while another 40 percent two (2) months after purchases.

Salaries and rental expenses will be paid RM50,000 and RM20,000 per month respectively. The firm expects to pay cash
dividends of RM20,000 in June and September. Meanwhile, taxes of RM80,000 and RM25,000 of fixed assets purchases
will be paid in August. The principal and interest payments of RM30,000 and RMIO, OOO are due in July respectively.

Assume that the firm has a cash balance of RM62,000 at the beginning of July and minimum cash balance of RM20,000,
prepare a cash budget for Zahra and Fatimah Company for the third quarter of 2018.

(16 marks)
 Zahra and Fatimah Company

Cash Budget for Third Quarter of 2018

April May June July August Sept

Sale 410 000 450 000 470 000 460 000 440 000 480 000
Cash Inflow
1. Cash sale (20%) 82 000 90 000 94 000 92 000 88 000 96 000
2. Credit sale (40% from
sale 1 month after) 164 000 180 000 188 000 184 000 176 000
3. Credit Sale (40% from
sale 2 month after) 164 000 180 000 188 000 184 000

4. Other cash Inflow 12 000 15 000 27 000

1. Total Cash Inflow 475 000 460 000 483 000

Cash Outflow
1. Purchases 120 000 150 000 140 000 100 000 80 000 110 000
2. Cash Payment 10% 12 000 15 000 14 000 10 000 8 000 11 000

3. Payment (50% after 1 60 000 75 000 70 000 50 000 40 000

Month)

4. Payment(40% after 2 48 000 60 000 56 000 40 000

Month)
5. Salaries 50 000 50 000 50 000
6. Expenses 20 00 20 000 20 000
7. Dividend 20 000 20 000
8. Taxes 80 000
9. Fixed Asset Purchases
25 000

10. Principal Payment 30 000

11. Interest Payment 10 000
2. Total Cash Outflow 250 000 289 000 181 000

Cash Reconciliations

Net Cash Flow (A-B) 225 000 171 000 302 000
+ Beginning Balance 62 000 287 000 458 000

Ending Balance 287 000 458 000 760 000

- Minimum Balance 20 000 20 000 20 000

Surplus 267 000 438 000 740 000

(January 2018) Part B Question 2
1. Given the following information, construct a cash budget for Farimida Corporation for the first quarter of 2018.

Sales for October 2017 until May 2018

October 2017 RM600,OOO February RM310,OOO

November RM650,OOO March RM250,OOO

December RM450,OOO April RM860,OOO

January 2018 RM350,OOO May RM750,OOO

ii. 40 percent of sales are for cash, 30 percent will be collected one month after sales and another 30 percent will
be collected on the second month after sales.

Raw materials for production will be purchased 60 percent, one month before sales in advance and paid 100
percent after two (2) month of purchased.

iv. Operating expenses for salaries and wages are estimated RM15, OOO every month, rental of RM5, OOO every
month and utilities amount to 2 percent of current month of sales. The interest of RMIO, OOO on
marketable securities will be paid in March.

v. Ending cash balance for December 2017 is RM20,OOO. The company also intends to maintain a minimum cash
balance of RMI 00,000 every month.
 Farimida Corporation

Cash Budget for First Quarter of 2018

October November December January February March

Sale 600 000 650 000 450 000 350 000 310 000 250 000
Cash Inflow
1. Cash sale 40 % 240 000 260 000 180 000 140 000 124 000 100 000
2. Credit sale (30% 1 month
after) 180 000 195 000 135 000 105 000 93 000
3. Credit Sale (30% 2
month after) 180 000 195 000 135 000 105 000

1. Total Cash Inflow 470 000 364 000 298 000

Cash Outflow
1. Purchases (60% an 390 000 270 000 210 000 186 000 150 000 516 000
advance)

2. Payment (100% after 2

months) 390 000 270 000 210 000 186 000
3. Operating Expenses 15 000 15 000 15 000

4. Rental 5 000 5 000 5 000

5. Utilities (2% from sales) 7 000 6 200 5 000

6. Interest 10 000
2. Total Cash Outflow 297 000 236 200 221 000

Cash Reconciliations

Net Cash Flow (A-B) 173 000 127 800 77 000

+ Beginning Balance 20 000 193 000 320 800

Ending Balance 193 000 320 800 397 800

- Minimum Balance 100 000 100 000 100 000

Surplus 93 000 220 800 297 800