5/ Question 5 Mr. and Mrs. Brown own shares of Tetap Sdn Bhd, which was set up five years ago. Tetap Sdn Bhd deals with imports and exports of sports equipments. The business has been very successful, expanding rapidly over the last two years, and the cash balance in the company's current account has exceeded RM 1 million on several occasions recently. Mr and Mrs Brown have asked you, as their financial analyst, to assist them in managing their cash balances over the next six months. You have been provided with the following information: i. The bank balance on 1 January 2023 is RM1-2 million. ii. Sales for November and December 2022 were RM1.3 million per month. They are expected to rise to RM1-5 million in January 2023, RM1-7 million in February and RM1-9 million in March. They will then fall to RM1-4 million for each of the following six months. This is due to the current economic downturn. iii. All sales are made on credit. 2% of debtors do not pay at all, 70% pay one month after sale and the remaining 28% pay two months after sale. iv. Purchases are made one month prior to sales, and two months' credit is taken from suppliers. v. The company's gross profit margin is 50%. vi. The cost of employing Tetap Sdn Bhd's permanent staff is RM150,000 per month. Tetap Sdn Bhd also employs temporary staff during January, February and March at an additional cost equating to 3% of sales each month. vii. Tetap Sdn Bhd uses a courier company to despatch the equipment to its customers. The cost of this service is 2% of sales value in January to March, falling to 1% thereafter. viii. Administration costs are forecast at RM30,000 for January. These costs are directly proportional to sales each month. ix. Mr and Mrs Brown will be attending a conference abroad in July 2023 at a total cost of RM5,000. They must complete the booking form and send it off, along with a deposit of RM2,000, by the end of January 2023 . The final balance is due in June. x. The company charges depreciation of RM45,000 each month. xi. Tetap Sdn Bhd also owns two fitness centres that it rents out at the rate of RM3,500 each per month from January to April, falling to RM3,000 per month thereafter. All rents are received one month in advance. xii. The company intends to upgrade their computer systems later in the year. This will be paid for by two equal instalments of RM200,000, one in June and one in September. NOTE: - All denominations should be in RM'000. - Assume payments are made in the month in which the costs are incurred. Required: Prepare a monthly cash budget for EACH of the six months from January to June 2023. Show all workings clearly. (40 marks)