RM Question 2 (25 Marks) The following is the forecast of sales and expenditure from July 2018 to January 2019 for PR Bhd. Gross Sales General Postage Salaries Expenses Month RM RM RM July 54,000 4,200 3,600 6,000 August 45,000 4,800 4,200 6,000 September 66,000 4,200 3,600 7,200 October 81,000 5,400 3,600 7,200 November 75,000 6,000 3,600 9,000 December 63,000 4,200 3,600 9,600 January 66,000 6,000 3,600 9,600 ACC 2013: Managerial Accounting (DIBA) JULY 2021 CONFIDENTIAL 3/5 Additional data: 1. 2. 3. 4. 5. 6. Gross selling prices are calculated by adding 25% to the purchase price of goods. Sufficient goods are purchased and delivered each month to enable all the following month's sales to be made from these purchases. Normal credit terms for purchases are payment in the month after the month of delivery. General expenses are paid one month after they are incurred. Rates of RM24,000 are payable on 1 October 2018 Salaries and postage are paid in the month in which they are incurred. 60% of sales are made for cash. 40% of sales are made to retailers after allowing a trade discount of 10% of the selling price. These sales are paid for on average two months after delivery. The balance at bank on 1 October 2018 is estimated at RM60,000. 7. Required: (a) Prepare monthly cash forecasts for the months October, November and December (20 marks) (b) Define a cash budget and discuss its uses to the management. (5 marks) 2018