Power Achilles Sdn Bhd (PASB), a consumer product distribution company, is preparing its budget for the coming quarter ending 31 March 2017. The company has recently expanded its business. The following data information is assembled for the budget preparation process: 1. Actual sales for October and November 2016 and budgeted sales for December 2016 to April 2017 are as follows: October 2016 10,000 units November 2016 15,000 units December 2016 12,000 units January 2017 18,000 units February 2017 16,000 units March 2017 20,000 units April 2017 22,000 units 2. Based on past experience, 25% of sales are cash sales. The remaining credit sales are collectible at 25% in the month of sales; 35% in the month following sales; 40% in the second month following sales. The selling price and cost of sales are RM8 per unit and RM3 per unit respectively. 3. 4. All purchases are made by cash. The desired monthly closing inventory is 60% of the next month's estimated sales. 5. The budgeted expenses, payable in the same month as incurred, for the first quarter of year 2017 are given below: Wages and salaries Rent Depreciation January RM 54,000 12,000 20,000 February RM 49,000 12,000 20,000 March RM 40,000 12,000 20,000 6. Advertising 5% of total sales of the month PASB is expecting to pay RM50,000 cash as down-payment in January 2017 for a purchase of lorries which cost RM300,000. The remaining will be paid via a bank loan. Final dividend of RM50,000 from its subsidiary is expecting to receive in the month of March 3017. 7. 8. Opening cash balance on 1 January 2017 is amounted to RM48,800. 9. 10. PASB has to maintain a cash balance of at least RM30,000 at the end of each month. PASB has an agreement with Public Bank that allows the company to borrow in increments of RM1,000 at the beginning of each month. The interest rate on this loan is 12% per annum. PASB has a policy of repaying outstanding loan plus accumulated interest at the end of the month whenever possible. REQUIRED: Prepare the following schedules and budgets for the month of January, February and March 2017 (total for the quarter is not required): (1) Schedule of expected cash collections. (12 marks) (ii) Purchases budget. (8 marks) (iii) Cash budget. (12 marks)