Part 2 (Questions in Part 1 are related)

PeeKayPee hopes that 2021 will bring a new light to the business world after being severely affected by the drop in sales in 2020 as a result of the implementation of the Movement Control Order (PKP). By 2020, PeeKayPee has had to adapt the method of operating the business online to enable the company to continue to survive and remain relevant in the market.

After almost a month of operation in 2021, PeeKayPee was shocked by the announcement by the Malaysian government that it has decided to re-implement PKP throughout Peninsular Malaysia to curb the spread of the third wave of the Covid-19 epidemic. As a result of the implementation of PKP this time, PeeKayPee had to limit the operating hours of their business from 10 am to 8.00 pm only for a period of 2 weeks starting on 22 January 2021 until 4 February 2021. This will again directly affect the projected sales revenue in cash budgets that have been made previously. The number of customers is also expected to decrease compared to before

However, based on the number of cases during Covid-19 infection in Malaysia which now exceeds 3,000 cases a day, PeeKayPee expects the implementation of PKP this time will last until August 2021.

To continue its business continuity, PeeKayPee has decided to re-project its sales revenue for February 2021 to August 2021.

Monthly merchandise inventory purchases are reduced by 60% from the previously planned total volume starting in February 2021 and for the following months until August 2021.

Projected sales proceeds for PeeKayPee Sdn. Bhd. for February to August 2021 is as follows

Month	Sales (RM)
Februari	65,000
Mac	90,000
April	85,000
Mei	75,000
Jun	118,000
Julai	135,000
Ogos	65,000

The following is additional relevant information:

i. The owners of shop lots rented by PeeKayPee have agreed to provide a deduction of 20% of the original rental rate for the monthly rent of business premises for 3 months starting from February until April 2021.

ii. Providing incentives from the government is expected to help PeeKayPee save various other expenses by 20% every month starting in February 2021.

iii. PeeKayPee has received permission to defer tax payments until September 2021.

iv. The minimum cash balance requirement of RM20,000 per month is now reduced to only RM15,000 starting in February 2021. If the minimum cash balance requirement cannot be met, companies can obtain short-term cash financing facilities from banks at a rate of 12% per annum.

Based on the information provided, re-prepare the cash budget for PeeKayPee from February to June 2021 taking into account the changes that occur / may occur due to the re-implementation of PKP starting on 22 January 2021.

(20 marks)