QUESTION 4
PART A
Nura Consulting Company Sdn. Bhd. is preparing its budget for the first quarter of 2021.
The preparation of a cash receipts plan and a cash payments schedule is the next phase in
the budgeting process. The following data has been gathered to that end:
Clients usually pay 60% of their fee in the month that service is provided, 30% the month
after, and 10% the second month after receiving service.
Actual service revenue for 2020 and expected service revenues for 2021 are: November
2020, RM120,000; December 2020, RM110,000; January 2021, RM140,000; February
2021, RM160,000; March 2021, RM170,000.
Purchases on landscaping supplies (direct materials) are paid 40% in the month of
purchase and 60% the following month. Actual purchases for 2020 and expected
purchases for 2021 are: December 2020, RM21,000; January 2021, RM20,000; February
2021, RM22,000; March 2021, RM27,000.
Required:
Prepare the following schedules for the first quarter of 2021 for:
a) Expected collections from customers
b) Expected payments to suppliers
(16 marks)
Continued...