Gastro Corporation supplies acetylene and other compressed gases to industry. You as a Finance Manager of the company, need to prepare the cash budget for the month of November and December. Data regarding the store's operations follow: • Sales are budgeted at RM310,000 for November, RM330,000 for December and RM320,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month of following sale. All account receivable on October 2020 will be collected in month of November. Purchase of inventory are expected to be RM238,700 for November and RM254,100 for the month of December. 85% of the purchase are paid in the month of purchase, the remainder are paid in the following month. • Other monthly expenses to be paid in cash are RM20,500 every month. • During November, the company will borrow RM7,595 from its bank by giving a new note payable to the bank. The new note will be due in one year. Statement of Financial Position 31 Oct 2020 Assets: RM Cash Account Receivable Merchandise inventory Property, plant and Equipment 21,300 82,300 202,895 999,000 TOTAL ASSETS 1,305,495 Liabilities and Equity: Account Payable 195,300 540,000 Common Stock Retained Earning 570,195 TOTAL LIABILITIES AND EQUITY 1,305,495
Gastro Corporation supplies acetylene and other compressed gases to industry. You as a Finance Manager of the company, need to prepare the cash budget for the month of November and December. Data regarding the store's operations follow: • Sales are budgeted at RM310,000 for November, RM330,000 for December and RM320,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month of following sale. All account receivable on October 2020 will be collected in month of November. Purchase of inventory are expected to be RM238,700 for November and RM254,100 for the month of December. 85% of the purchase are paid in the month of purchase, the remainder are paid in the following month. • Other monthly expenses to be paid in cash are RM20,500 every month. • During November, the company will borrow RM7,595 from its bank by giving a new note payable to the bank. The new note will be due in one year. Statement of Financial Position 31 Oct 2020 Assets: RM Cash Account Receivable Merchandise inventory Property, plant and Equipment 21,300 82,300 202,895 999,000 TOTAL ASSETS 1,305,495 Liabilities and Equity: Account Payable 195,300 540,000 Common Stock Retained Earning 570,195 TOTAL LIABILITIES AND EQUITY 1,305,495
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Transcribed Image Text:Gastro Corporation supplies acetylene and other compressed gases to industry. You as a
Finance Manager of the company, need to prepare the cash budget for the month of
November and December. Data regarding the store's operations follow:
• Sales are budgeted at RM310,000 for November, RM330,000 for December and
RM320,000 for January.
Collections are expected to be 80% in the month of sale and 20% in the month of
following sale. All account receivable on Otober 2020 will be collected in month of
November.
• Purchase of inventory are expected to be RM238,700 for November and RM254,100
for the month of December. 85% of the purchase are paid in the month of purchase,
the remainder are paid in the following month.
• Other monthly expenses to be paid in cash are RM20,500 every month.
• During November, the company will borrow RM7,595 from its bank by giving a new
note payable to the bank. The new note will be due in one year.
Statement of Financial Position 31 Oct 2020
Assets:
RM
Cash
21,300
Account Receivable
Merchandise inventory
Property, plant and Equipment
82,300
202,895
999,000
TOTAL ASSETS
1,305,495
Liabilities and Equity:
Account Payable
195,300
Common Stock
540,000
570,195
Retained Earning
TOTAL LIABILITIES AND EQUITY
1,305,495
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