NEW Bhd manufactures and sells Product ST.

The company is preparing its budgets for the six months ending 30 September 2021. The following sales and costs have been budgeted: April May June July August September RM RM RM RM RM RM Sales 75,300 72,200 74,300 73,900 72,600 71,800 Raw materials 34,400 34,600 33,300 35,100 32,600 33,200 Direct wages 18,500 16,500 17,700 16,700 17,100 16,200 Factory overheads 11,500 11,600 11,700 11,800 11,600 11,900 Administration costs 6,400 6,700 6,500 6,100 6,300 6,200

The following additional information is available:

(1) There are no cash sales. 60% of the customers are given one months credit, and the remaining customers two months credit. Sales for February and March are RM76,200 and RM78,700 respectively.

(2) Raw materials are payable in the month following purchase. March purchases amounted to RM32,500.

(3) Direct wages and administration costs are payable in the month of incurrence.

(4) The factory overheads include depreciation charge of RM2,500 per month and are payable in the month incurred.

(5) The company plans to purchase machinery which will be payable as follows: RM May 26,000 June 16,000

(6) Taxation of RM21,600 is payable in July.

(7) Bank balance is expected to be RM9,600 on 1 April.

Required:

(a) Prepare the cash budget for each of the six months from April to September 2021. (20 marks)

(b) Comment on the company's financial position based on the answer for part (a) above. (5 marks)