Extra Tutorial 1 - Cash Budget

Maxx Sdn Bhd has predicted the following sales and purchases for the next 2 quarters.

Sales Purchases
Months Cash Credit Cash Credit
Nov 11,500 36,400 7,500 21,700
Dec 12,500 37,400 7,000 24,000
Jan 11,400 38,700 5,000 22,400
Feb 12,000 40,100 7,800 27,000
Mar 13,400 39,700 6,800 26,400
Apr 11,200 41,500 5,700 24,600
May 10,500 42,100 6,500 25,000
Jun 12,400 43,400 5,900 25,400
Jul 14,100 44,100 6,000 24,500

All Credit Sales are received 1 month after sales and Credit purchases paid 2 months after the purchase.

The following monthly expenses are paid regularly on the month they are incurred:

Expense RM
Rental 7,500
Electricity 3,500
Admin 2,500
Wages 2,800
Insurance 1,500

Additional info:

1. The balance in cash as at 31st December last year was RM55,800.

2. There is a purchase of an equipment expected at RM15,000. This will be paid in 2 monthly instalments with the 1s

3. A maintenance bill will be received in June and December every year. We are expected to pay off the amounts of R

a) Prepare the Cash Budget for Q1 and Q2.

b) The management is considering purchase of a huge machinery at RM85,000. Which of the month in Q1 and Q2 is
instalments with the 1st in May.

ay off the amounts of RM800 per month 1 month after the receipt of the invoices.

month in Q1 and Q2 is the best to do so? (If none, state none). Explain why.