Extra Exercise- Cash Budget

Mawar Bhd is a manufacturing company. It prepares monthly s for financial planning

purposes. The following budgeted income statement was prepared for the six months ending
June 2014:

January February March April May June

RM RM RM RM RM RM
Sales 50,000 55,000 48,000 52,000 55,000 50,000

Materials 12,000 15,000 18,000 18,000 20,000 21,000

Wages 9,000 9,200 9,100 9,300 9,200 9,400
Expenses 12,000 15,000 14,000 12,000 14,000 15,000
Total cost 33,000 39,200 41,100 39,300 43,300 45,400

Profit 17,000 15,800 6,900 12,700 11,700 4,600

The following additional information is also available:

1. There are no cash sales. To receive from customers half of the sales value in the month
following the sales and the balance in the second month.

2. Material purchases are payable in the month after purchase. The supplier will give a cash
discount of 5% for all purchases.

3. Wages will be payable in the month incurred.

4. Depreciation of RM 2,000 is included in expenses each month. Expenses also include

RM 1,000 rental which will be paid next month. The other expenses will be paid in the
month incurred.

5. During May, the company plans to purchase a second hand motorcycle for despatch
costing RM 2,000.

6. A bank balance of RM 15,500 is estimated at the beginning of April.

Required:

Prepare a monthly cash budget for the second quarter of 2014.

(Total: 25 marks)