OHI Marine offers a range of products and services related to the fishing, marine and water sports industry. The company is the exclusive dealer of Jet Skis in GCC countries. The company procures Jet Skis from various international suppliers and sells for customers in all the GCC countries. The Marketing Department of the company has developed the sales forecast for the months of March to August 2020 assuming the selling price of RO 2000 per unit. However, the marketing Department predicts a fall in the selling price by 10% per unit from the month of June 2020.

Sales forecast (in Units)

March 60 April 80 May 100 June 110 July 120 August 90

Other relevant data :

i) The Cash balance as on 1st May 2020 is RO 25,000

ii) The company has 30 units of finished goods in stock as on 1st March 2020. The company wishes to maintain the finished goods inventory equal to 40% of the next month sales. Each unit is purchased from the suppliers at RO 1400 but the company expects the prices to decrease by 5% per unit from the month of June 2020.

iii) 50% of the sales are on cash basis. All the amount from credit sales is collected in the second month following sales

iv) Trade Creditors are paid in the month following purchases.

v) The selling expenses amount to 10% of sales. The lag in payment of selling expenses is one week.

vi) The sales commission is paid at 5% of sales in the same month in which it is earned.

vii) The company has taken a loan of RO 40,000 in the month of July.

viii) Income on investments of RO 2000 is expected to receive in the month of June.

ix) The company purchased machinery worth of RO 100,000 in the month of July. The amount is payable in four equal instalments starting from May.

x) Depreciate machinery at RO 10,000 per month.

As a financial manager, prepare the cash budget of United Gulf Pipe Manufacturing Co. LLC for four months starting from May 2020.