Answer to Question #224715 in Accounting for sindly

Question

MEIMEI company. It will begin operations on July 1, 2009. The following estimates have been prepared:

Sales - cash

• July (RM) = 5,400
• August (RM) = 9,720
• September (RM) = 12,000

Sales - credit

• July (RM) = 12,600
• August (RM) = 22,680
• September (RM) = 28,000

Purchases – cash

• July (RM) = 2,000
• August (RM) =3,000
• September (RM) = 4,000

Purchases - credit

• July (RM) = 15,000
• August (RM) = 16,000
• September (RM) = 17,000

1. 30% of credit sales are paid in the month of sale, the balance is payable in the month following sale.
2. The initial cash contributions are RM20,000.
3. Fixed overheads are expected to be RM5,000 per month, including RM1,000 depreciation. 50% of the overheads are paid in the month incurred and the balance are paid in the following month.

You are to require to:

(a)  Prepare a monthly cash budget, in columnar form, showing the bank balance at the

       end of each month, for July, August and September 2009. 

Answer 1

The answer to your question is provided in the image: