11. Negombo Traders is preparing a production budget for the first quarter of the year 2021. Negombo Traders wants to maintain 20% of finished products as a closing stock from the next month's estimated sales. Projected sales for year 2021 January, February, March, and April are 200,000 units, 250,000 units, 350,000 units and 500,000 units respectively. Required: Production Budget for the months of January February and March 2021 (06 Marks) iii. Kandy Traders, a merchandising firm that sells one product, assembled the following information and estimates to prepare a budget for the month of October. 1. Expected sales in October are 500.000 units at a price of Rs 60 per unit. Colombo Traders estimates that 60% of each month's sales are collected in the month of sale and the remaining 40% is collected in the month after sale Sales for the month of September was Rs 24 million. 2. Kandy Traders plans to purchase 600.000 units of merchandise in October. The cost of merchandise purchases is expected to be Rs 50 per unit. The company pays for 40% of its merchandise purchases during the month of purchase, and pays the remaining 60% during the month following purchase. Merchandise purchases for September was Rs 25 million 3. Monthly selling and administrative expenses are estimated at Rs 1 500.000, of which Rs 300.000 is monthly depreciation. All other out-of-pocket expenses are paid for in cash 4. The October 01" cash balance was Rs 100.000, Required: (a) Prepare a cash budget for the month of October (06 Marks) () Prepare a budgeted income statement for the month ended October 31 (07 Marks) (TOTAL 25 MARKS) End of the Question Paper