Subject : Financial Mgt

Please answer the following questions.

a) Prepare a cash budget for Apple Berhad for the third quarter of 2023. (40 marks)

b) Please comment on the results obtained from the cash budget calculated above. (5 marks) c)Please recommend to the company based on the answer in (b). (5 marks)

APPLE BERHAD Apple Berhad is trying to estimate its cash requirement for the third quarter of the year 2023. a) The company's forecasted sales are as follows: b) c) d) e) 1) g) h) i) D) k) Month April May Jun July August September October Sales 80,000 85,000 90,000 100, 000 125,000 105,000 130, 000 The collection of cash sales is 50%, 40% is collected one month after sales, 5% is collected two months after sales, and 5% is uncollected. Purchases of raw materials are 70% of sales and are made one month in advance. Payments are made equally in the two months after purchases. Operating expenses will be 10% of the monthly sales. Other fixed monthly expenses: i) Rental RM3,000 ii) Salaries and wages RM20,000 iii) Depreciation RM13,000 iv) Insurance RM2,000 Tax repayment of RM9,000 is made at the end of each quarter. The yearly interest on RM200,000, 5% debentures of RM1 each, is due to be paid on 15 July 2023 each year onwards. The other cash collection is from shop lots of rental payment of RM40, 000 per month and will be collected starting June 2023. A quarterly dividend of RM3,000 will be received at the beginning of each quarter. At the beginning of the third quarter of 2023, the company plans to purchase a machine at the cost of RM50,000 and expected to be disposed of 10% of the initial cost at the end of the year 2026. Ending cash balance at the end of the second quarter is RM30,000 with a minimum cash balance of RM15,000, and this amount needs to be maintained at all times. Any short-term financing borrowed from a creditor to maintain a minimum cash balance would be paid off in the month following the month of financing needed. Interest on short-term loans is charged at 10% per annum