Sendayu Mahal Distributor Sdn

Sendayu Mahal Distributor Sdn Bhd (SMDSB), a distributor of cosmetics throughout Malaysia, is in the process of assembling a cash budget for the last quarter of 2020. The following information has been extracted from SMDSB’s accounting records:

  1. All sales are on accounts. 60% of customer accounts are collected in the month of sale; 35% are collected in the following month. Uncollectible amounting to 5% of sales is anticipated and the management believes that only 20% of the accounts outstanding on 30 September 2020, will be recovered and the recovery will be in October 2020.
  1. 70% of the merchandise purchases are paid for the month of purchase, the remaining 30% are paid for in the month after acquisition.
  1. As at 30 September 2020, SOFP disclosed the following selected figures: cash RM30,000, Trade receivables RM65,000 and trade payables RM30,000.
  1. SMDSB maintains a RM30,000 cash balance at all times. Financing is available (and retired) in RM1,000 multiples at an 8% interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principle repaid at that time.
  1. Additional data:

Oct 20 RM’000

Nov 20 RM’000

Dec 20 RM’000

Sales Revenue

200

250

300

Merchandize Purchases

100

110

120

Cash operating costs

25

30

45

Proceeds from sale of equipment

6

Purchase of machinery

7

Received of Dividend

15

Required:

  1. Prepare SMDSB’s Schedule of Cash Collections from October through December 2020.

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