Question 2

Megat Ltd is planning its cash flow for the next three months and the following information is available.

 The business will have an overdraft of RM7,250 on 1 November 2018.

 Sales and purchases will be as follows:

                                                Sales (RM)                    Purchases (RM)

   September 2018                   14,000                          6,600

   October 2018                        14,300                          7,150

   November 2018                    15,200                          7,480

   December 2018                     16,100                          7,860

   January 2019                         16,600                          8,230

 35% of the sales income will be received in the month following the sale and 63% will be received two months after the sale. The balance will be written off as an bad debts.

 Purchases will be made on one month\'s credit.

 Wages and salaries will be RM2,24 per month, payable in the same month.

 Company pay water bills every months amounted RM1,500.

 Heat, light and power will be RM225 per month and paid quarterly in January, April, July and October 2019.

 Other costs will be paid RM960 per month plus 5% of sales, payable in the same month as the sale was made.

 Bank charges are 2% per month on any overdrawn balance at the end of a month. This is charged in the following month.

Requirement:

(a) Prepare the Cash Budget for each of the three months November 2018, December 2018 and January 2019. The budget should be in columnar format and all figures should be calculated to the nearest RM.