Question
Noble International Company Limited (NICL) deals with the production and supply of Cars
Worldwide. Terms of Purchases and Sales are as follows:
Purchases of Raw Materials
Sales of Finished Goods
10% Upfront before the month of collection
50% During the month of collection
15% Ordering Month
55% Month of Collection
15% Month of inspection
12% Following month of inspection
10% Month following collection
5% Inspection Month
7% Month of production
8% Month following Inspection
5% Next month of production
7% The month following month of inspection
During the year 2019 and 2020 the following transactions occurred;
i)
Purchases for the month of April 2019 was TZS 100,000,000.00. The figure has
constantly decreased by 15% for each month following until December 2020;
ii)
Sales for the month of April 2019 was TZS 150,000,000.00 which accelerated each
month by 10% until December 2019. The month following the increasing rate rise
to 15% until December 2020;
iii)
Raw materials are paid one month before the month of collection;
iv)
Order is received one month before production;
v)
Collection of finished goods is done the month following production;
vi)
Inspection of finished goods is done two months following the month of production;
vii)
Inspection of raw materials is conducted two months after collection;
viii)
Production is done the month following inspection of raw materials;
ix)
Cash Balance at the end of June 2020 were TZS 20,000,000.00; and
x)
Other related costs include, Salaries and Wages, Rent, Depreciations and Electricity
amounted to TZS 10,000,000.00; TZS 6,000,000.00; TZS 2,000,000.00; and TZS
3,000,000.00 respectively. All costs were paid each month except for depreciation
which is accounted at the end of the year.
Required
Prepare Cash budget for six months ending December 2020.