FINANCIAL MANAGEMENT

Pretty Berhad's projected sales for the first seven months of 2021 are given below:

January RM250,000

February RM340,000

March RM280,000

April RM300,000

May RM350,000

June RM380,000

July RM300,000

30% of sales are collected in cash at time of sale, 50% are collected in the month following the sale, and the remaining 20% are collected in the second month following the sale.

Cost of goods sold is 50% of sales. Purchases and payments are made in the month prior to the sales.

The company plans to buy an equipment worth RM20,000 in the month of May 2021.

Monthly salary is RM35,000 per month. Total other cash expenses are RM90,000/month.The company's cash balance as of March 31, 2021, will be RM30,000. Excess cash will be used to retire short-term borrowing (if any).

Pretty Berhad has no short-term borrowing as of March 31, 2021. Short term loan can be obtained in the end of each month at 12% annual interest with interest paid in the following month for which the loan is outstanding.

The company must have a minimum cash balance of RM25,000 at the beginning of each month.

Required:

Prepare the cash budget for the second quarter of 2021.