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Question 2 Symphony Bliss Sdn. Bhd. commenced a business twelve months ago and has received a tremendous supports from the music industry Due to its

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Question 2 Symphony Bliss Sdn. Bhd. commenced a business twelve months ago and has received a tremendous supports from the music industry Due to its successful operation, the company is seeking bank nance to expand its business. The company imports a specialised guitar from an overseas supplier and currently sells the guitars in a limited range of stores in Shah Alam. The guitar is exclusive in that it comprises a high quality. distinctive looking and unique sounding guitars in the Rock history. Additional bank funding would allow the company to extend its retailer network across Malaysia with the possibility of establishing outlets in other parts of ASEAN countries. However, to consider an application for the nance. the bank requires Symphony Bliss Sdn. Bhd. to prepare a cash budget, forecasting its receipts and payments for the next six months commencing on 1 May 2020. The company has provided the following information: a. Each guitar will cost RM620 to purchase from the overseas supplier and the company has agreed to pay 50% of all purchases in cash with the remainder paid in die month after purchase. b. Symphony Bliss Sdn. Bhd. will sell the guitar to retail customers for RM1,120 and projects the following sales (in units} for the next six months: June July 2,500 August 2.500 Septembe r c. To encourage prompt payments from customers, effective from 1 May 2020, the company has decided to give a discount for cash payment. Symphony Bliss Sdn. Bhd. expects that 20% of all customers will avail of this offer and will receive a discount of 5%. Of the remaining moneys receivable, the company expects to receive 50% one month after the month of sale, 45% two months after the month of sale and the remainder will be bad debts. d. To ensure that sales opportunities are not missed, the company will hold inventory at the end of each month amounting to 10% of the following month's projected sales. At 1 May 2020, the oompany expects to have 500 guitar in inventory. e. Salary and wage costs per month are expected to be RM19,000.00 for the rst two months and to increase by RM2.000.00 per month for each of the next four months, as the company hires new staff. f. Administration oosts are projected to be RM82,200.00 for the year, including depreciation of RhESCKLDU g. The company has decided to purchase additional computer equipment to support its sales staff. Laptops and printers costing RM16,200.00 will be purchased and paid for in October

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