QUESTION 1 Your company has approached its bankers for loan facilities to be made available during the coming quarter. The bank has responded by requesting that a cash budget is prepared before any decision can be taken. The following information has been compiled: Sales Purchases Wages Hire purchase payment Cash expenses Depreciation Capital expenditure Notes: June RM'000 150 120 20 15 20 5 13 July RM'000 200 60 22 15 30 5 August RM'000 100 40 15 15 15 5 1. Debtors on 1 June amount to RM84,000 of which it is estimated RM78,000 will be collected during the month and RM4,000 in July. The balance is to be written of as bad debt. The expected pattern of cash collection from sales is 25% during the month of sales, 70% in the month following sale and 4% in the next month. 2. On 1 June, the amount owing to creditors for purchases was RM90,000. Purchases and capital expenditure are paid in the month following the month of supply. 3. The opening cash balance at 1 June is RM2,250. Required: Prepare (a) A Cash Budget for June, July and August. (33 marks) (b) Commend on the result of the cash flow budget and sugest TWO ways to improve the situation. (12 marks) (Total 45 marks)