I

QUESTION: Prepare a cash budget for Merdeka Holdings for the first 6 months of 2022. Determine its cash shortages or cash surplus. Merdeka Berhad is estimating its funding needs for the year 2022. The company's actual and forecasted sales are as follows: Month Oct 2021 Nov 2021 Total Sales (RM) 1,500,000 1,900,000 2,000,000 Dec 2021 Forecasted Sales in 2022 Jan Feb March April May June July Aug 2,500,000 2,600,000 2,650,000 3,650,000 3,850,000 3,780,000 3,900,000 4,000,000 Additional information are as follows I. The company's collection policy of sales are as follows: 20% are cash sales, 50% are collected in 1 mont after sales and the remaining sales are collected 2 months after sales. Purchases of materials are 70% of sales and are made 1 month before the sales occur. 50% of the purchases are on paid cash basis and the remainder will be paid equally in 2 months after the purchase. iii. Monthly expenses are: Salaries - RM85,000 Rent - RM10,000 Administrative expenses -1% of the monthly sales Utilities - RM10,000 EPF and SOCSO -1% of the monthly sales and insurance premium RM 15,000 Depreciation expenses - RM30,000 iv. V. Company's tax payment to the LHDN amounted RM20,000 are divided into 4 payments and are paid at the beginning month of each quarter. A machine costing of RM150,000 will be bought in December 2021 and payment for the machine is to be made into 12 equally payments starting from January 2022 onwards. Dividend of RM 30,000 to shareholders will be paid at the end of each quarter. The company is expected to received dividend from Petronas shares amounted RM55,000 in February vi. viii. Interest income RM 25,000 from short term investment will be received in January and May. Interest on term loan of RM15,000 is payable at the beginning of every quarter. X. vi. Dividend of RM 30,000 to shareholders will be paid at the end of each quarter. The company is expected to received dividend from Petronas shares amounted RM55,000 in February. viii. Interest income RM 25,000 from short term investment will be received in January and May. Interest on term loan of RM15,000 is payable at the beginning of every quarter. X. xi. The company's ending balance in December 2021 is RM100,000 and they expect to maintain a monthly minimum cash of RM35,000. (20 marks)