QUESTION 1 The following is the information of Star Millenia Pte. Ltd. For the second half of 2021: Month June July August September October November December Sales (RM) 9,000 9,750 10,500 11,250 12,000 12,750 13,200 Raw materials (RM) 5,400 6,000 7,200 6,750 6,900 7,500 7,800 Wages (RM) 1,950 2,250 2.250 2,250 2,400 2,700 3,000 Production overhead (RM) 675 765 750 900 900 1,050 1,050 Administrative and Selling (RM) 480 480 525 525 600 600 675 Additional information: a. Assume the cash and bank balance on 1 October 2021 is RM4,500. b. Ten percent of sales are made on cash. For credit sales, 50% percent are paid in third month following the sales and the remainder in the fourth month. c. Materials are paid in the third month of purchase. d. Three-fourths (3/4) of wages are paid in the month incurred and one-fourth (1/4) in the following month. e. One half of the production overheads are paid as incurred and the balance in the following month. f. Administrative and selling expenses are paid as incurred. g. The company plans to pay cash dividends of RM7,500 on 1 December 2021. h. Income tax (advance) is to be paid in December for RM1,500. i. Plant and machinery at a cost of RM7,200 is to be installed in August 2021. It will be paid for by monthly instalments of RM1,500 starting from 1 October 2021. j. In order to ensure the company is always able to pay for its short term obligations, the company would like to keep monthly ending cash balance of RM2,000. k. The company enjoys an open line credit facility from its bank up to a maximum of RM15,000 at a profit of 2% per annum. Any profit associated with a financing will be paid together with the repayment of the principal. Required: From the information given, prepare: a. a schedule of cash receipts from sales for the three months ending 31 December 2021. (7 marks) b. a cash budget for the three months ending 31 December 2021 and the total for the months. (15 marks) c. a note to discuss briefly the benefits of cash budgets for businesses