(a) The global economic has been affected by Covid19 pandemic and the businesses faced tough situation to sustain their financial cash flow. During the first quarter of 2021, the revenue of Denai Holdings has decreased tremendously, therefore, the company decided to have a board meeting in next month. The following is a projected sales of Denai Holdings for the third and fourth quarter of 2021:

Additional information:

(i) The company is able to makes 20 percent cash sale, 50 percent will be collected in the month following sales and 30 percent will be collected in the second month following sales.

(ii) Every end of quarter, the firm will receive a dividend of RM2,850 from investment in property.

(iii) Purchases are 60 percent of sales. 42 percent of purchases are paid one month before the sales occur and the remaining balance paid in the following month.

(iv) The company pays RM365,080 each month for wages.

(v) Administrative expenses is RM90,700 each month.

(vi) Tax repayment of RM80,900 are made at the beginning of each quarter.

(vii) Interest on term loan of RM59,240 is payable at the beginning of each quarter.

(viii) In November, the firm has to renew its insurance policy and has to pay RM65,980 for that purpose.

(ix) The firm has bought an office vehicle in 2019 and will be depreciated by RM2,890 per year.

(x) Interest on accumulated loan is at 18 percent annual interest and paid in the following month.

(xi) Beginning balance is RM38,000 and a minimum of RM255,000 must be maintained at all times.

In preparation of the meeting, the management has assigned finance team and lead by Mr. Hamidi to prepare the cash budget for the fourth quarter of 2021.

Month August September October November December Sales (RM) 1,500,000 1,600,000 1,650,000 1,630,000 2,109,000