PLEASE SHOW THE WORKING AND CALCULATION

Arbel plc manufactures and sells cosmetics and skincare products. It operates in a competitive market with a culture of constant scientific improvement. Arbel$$s strategic objective is to improve market share. Hence, the board of directors of Arbel plc has planned to expand its production to improve market share. To achieve this goal, the company must maintain a minimum cash balance of $200,000$ per month. As the management accountant of Arbel plc$,$ you are provided with following information:

$($i$)$ The budgeted amounts for sales and operating expenses are as follows:

Month Cash sales

$$ Credit sales

$$ Operating expenses

$$

July $202322,000210,00040,000$

August $202322,000230,00062,000$

September $202322,000220,00042,000$

October $202346,000240,00036,000$

$($ii$)$ The budgeted amounts for purchases are as follows:

Month Closing inventories

$$ Cost of sales

$$

July $202350,000135,000$

August $202344,000150,000$

September $202356,000152,000$

October $202348,000172,000$

$($iii$)50\%$ of the credit sales are expected to be received one month after the transactions take place while the other $50\%$ of the credit sales are expected to be received two months after the transactions have taken place.

$($iv$)$ All purchases are paid one month after the purchase.

$($v$)$ Monthly operating expenses are to be paid one month after they are incurred.

$($vi$)$ The estimated corporation tax is $120,000$ per annum to be paid on a monthly basis.

$($vii$)$ A new delivery van costing $24,000$ will be purchased in September $2023$ on credit, of which $14,000$ will be paid in October $2023$ and the balance amount will be paid in November $2023.$

$($viii$)$ The bank balance of the Company on $1$ September $2023$ will be $20,000.$x

Required:

In facilitating decision$-$making, as the management accountant of Arbel plc$,$ you are required to write a report to board of directors showing the monthly cash budget for September and October. If the company will not meet the minimum cash balance of $200,000$ for September and October $2023,$ you are required to advise board on different sources of external finance. When writing your report, you need to discuss the factors that may be considered by board when deciding between different sources of external finance, and advantages and disadvantages of each.