3. Stylish Sdn. Bhd. (SSB) commenced trading of mobile phone covers since 2018. The company is expanding its market and seeking for a bank loan. The bank requires SSB to prepare a cash budget, forecasting its receipts and payments for the next six months commencing from 1 May 2021. The company has provided the following information:

(i) Each mobile phone cover will cost RM6.20 to purchase from a supplier and the company has agreed to pay 50% of all purchases in cash with the remaining balances payable in the next month after purchase.

(ii) SSB sells mobile phone cover to retail customers for RM11.25 and estimates the following sales (in units) for the next six months:

Month Units

May 10,000

June 12,000

July 15,000

August 15,000

September 16,000

October 18,000

November 18,000

(iii) The company expects to receive cash payment from 20% of sales; 50% of the remaining sales figures will be received one month after the month of sale; 45% receivable two months after the month of sale and the remaining balances will be treated as bad debts.

(iv) To avoid missing the sales opportunity, the company holds monthly closing

inventory amounting to 10% of the following months projected sales figure. At 1 May 2021, the company expects to have 1,000 mobile phone covers closing inventory.

(v) Monthly salary and wages cost are expected to be RM19,000 for the first two months and increase by RM2,000 monthly for the next four months, as the company hires new staff.

(vi) Administration costs are projected to be RM82,200 for the year, including depreciation of RM9,900.

(vii) SSB decides to purchase additional computer equipment to support sales staff. Purchase of laptops and printers costing RM16,200 are payable in October.

(viii) At 1 May 2021, SSB estimates the following balances:

RM

Bank overdraft 2,960

Accounts receivable (all amounts to be received in May 2021) 30,980

Accounts payable (due in May 2021) 25,100

Required:

Prepare a cash budget for SSB for the next six months period commencing from May 2021 until October 2021.

(30 marks)