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Question no. 3: (9 Marks) Ar Rahman Corporation has projected sales and production in units for the second quarter of the coming year as follows: April May June Sales (units)...... 50,000 40,000 60,000 Production (units) 60,000 50,000 50,000 Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month. Selling and administrative expenses will amount to $100,000 per month. The accounts payable balance on March 31 totals $190,000, which will be paid in April. All units are sold on account for $14 each. Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale. Accounts receivable on April 1 totaled $500,000 ($90,000 from February's sales and $410,000 from March's sales). Required: a. Prepare a schedule for each month showing budgeted cash disbursements/payments (Accounts Payable) for Ar Rahman Corporation. (4.5 marks) 6

          Question no. 3:
(9 Marks)
Ar Rahman Corporation has projected sales and production in units for the second quarter of the coming year as
follows:
April	May	June
Sales (units)......	50,000	40,000	60,000
Production
(units)	60,000	50,000	50,000
Cash-related production costs are budgeted at $5 per unit produced. Of these production costs, 40% are paid in the
month in which they are incurred and the balance in the following month. Selling and administrative expenses will
amount to $100,000 per month. The accounts payable balance on March 31 totals $190,000, which will be paid in
April.
All units are sold on account for $14 each. Cash collections from sales are budgeted at 60% in the month of sale,
30% in the month following the month of sale, and the remaining 10% in the second month following the month of
sale. Accounts receivable on April 1 totaled $500,000 ($90,000 from February's sales and $410,000 from March's
sales).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements/payments (Accounts Payable) for Ar
Rahman Corporation.
(4.5 marks)
6

Question no. 3:
(9 Marks)
Ar Rahman Corporation has projected sales and production in units for the second quarter of the coming year as
follows:
April May June
Sales (units)...... 50,000 40,000 60,000
Production
(units) 60,000 50,000 50,000
Cash-related production costs are budgeted at 5 per unit produced. Of these production costs, 40% are paid in the
month in which they are incurred and the balance in the following month. Selling and administrative expenses will
amount to100,000 per month. The accounts payable balance on March 31 totals 190,000, which will be paid in
April.
All units are sold on account for14 each. Cash collections from sales are budgeted at 60% in the month of sale,
30% in the month following the month of sale, and the remaining 10% in the second month following the month of
sale. Accounts receivable on April 1 totaled 500,000 (90,000 from February's sales and 410,000 from March's
sales).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements/payments (Accounts Payable) for Ar
Rahman Corporation.
(4.5 marks)
6

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