Sonia Apparel Enterprise is planning for its short term financial forecasting.

The management is
in the process of preparing a monthly cash budget for the upcoming three months of 2015. Sonia
Apparel Enterprise has projected it sales and purchases for the first eight months of 2015 as
follows:

Bulan/Month Jualan/ Sales Belian/

(RM) Purchases (RM)
Jan 80,000 30,000
Feb 90,000 40,000
March 100,000 50,000
Apr 120,000 60,000
May 140,000 80,000
June 130,000 60,000
July 130,000 70,000
Aug 150,000 90,000
The management collects 25% of its sales in the same month of sales, 45% in the first month
following the sales and the remaining 30% two months after the sales.

Payments for raw materials are usually being paid 50% in the month of purchases and another
50% in the next month following purchases.

In addition, the management also pays other monthly expenses as follows:

Gaji & Upah / Salaries & RM 15,000

Wages
Bil-Bil / Utilities RM 5,000
Sewa/ Rent RM 7,000

Income tax for the year 2015 is estimated at RM 10,000 and will be paid equally each quarter
beginning March 2015. The management also plans to buy a new machine worth RM 25,000 in
April 2015. The companys cash balance as of 31st April 2015 is estimated at RM 10,000 and
wants to maintain a minimum cash balance of RM 25,000. Additional borrowing is necessary
to maintain that minimum balance and borrowing takes place at the beginning of the month in
which the funds are needed. Interest on borrowed funds equal 12% per annum and is paid in
the month following the loan. Assume that any short term financing needed to maintain the cash
balance is paid off in the month following the month of financing if sufficient funds available.

Prepare a quarterly cash budget for Sonia Apparel from April to June 2015.
 Sonia Apparel Enterprise
Cash Budget for April, May & June 2015

Particulars Apr May Jun

Forecasted Sales 120,000 140,000 130,000
Forecasted Purchases 60,000 80,000 60,000

Cash Receipt
25% cash sales 30,000 35,000 32,500
45% one month after sales 45,000 54,000 63,000
30% two month after sales 27,000 30,000 36,000
Total Cash Receipt 102,000 119,000 131,500

Cash Disbursement
Purchases
50% cash 30,000 40,000 30,000
50% one month after purchases 25,000 30,000 40,000
Salaries & wages 15,000 15,000 15,000
Utilities 5,000 5,000 5,000
Rent 7,000 7,000 7,000
Income Tax - - 2,500
New Machine 25,000 - -
Total Cash Disbursement 107,000 97,000 99,500

Net Change (5,000) 22,000 32,000

Plus: Beginning Cash Balance 10,000 25,000 26,800
Less: Interest on ST Borrowing - (200) -
Ending Cash Balance Before ST Borrowing 5,000 46,800 58,800

New Financing Needed (20,000) 20,000 -

Ending Cash Balance After ST Borrowing 25,000 26,800 58,800
Cummulative Borrowing (20,000) - -
Minimun cash balance 25000
(48 ticks x 0.5 = 24 mark)

interest = RM 20,000 x 12% x (1/12) 0.5 mark

= RM 200 0.5 mark
(Total : 25 marks)