Mariam owns a furniture store and she needs a cash budget for May 2021. Here is the information gleaned from her business records.

1. The cash balance on 1 May 2021 is RM2,250.

2. Sales for March 2021 and April 2021 are as follows:

March April

RM RM

Cash sales 30,000 54,000

Credit sales 86,700 105,000

Total sales 116,700 159,000

3. Cash collection from credit sales is done within three months: 30% in the month during the sale, 40% the second month after the sale and 28% the third month after the sale. The remaining balance could not be collected.

4. Inventory purchases are at the rate of 75% of current month sales. Inventory purchase payments are made in two months which is 40% of the month in which the inventory purchase was purchased and the balance in the following month.

5. The total salary payment is RM36,000 per month.

6. The monthly rental payment is RM12,000.

7. Tax paid for May 2021 is expected to be RM21,000.

8. The estimated sales for May 2021 is RM57,000 for cash sales and RM150,000 for credit sales.

REQUIRED:

a) Prepare a cash budget for May 2021.

b) Give TWO (2) pieces of advice that can help Mariam improve her cash budget if her cash expenditure shows a negative balance.