The Ahmad Furniture Sdn Bhd (AF) projected sales for the first 8 months of 2008 are as

follows:

January RM300.000

February RM450.000

March RM540.000

April RM960.000

May RM1,200,000

June RM1,000,000

July RM900.000

August RM700.000

20% of AF Sdn. Bhd. sales are for cash, another 40% is collected in the month followingsales, and 40% is collected in the second month following sales. November and December sales for 2007 were RM800.000 and RM650.000 respectively.

AF Sdn. Bhd. purchases of raw materials equals to 60% of sales and is made two months in advance of sales. The supplier is paid one month after the purchase Furthermore, AF Sdn. Bhd. pays RM42,000 per month for rent, and RM90.000 per month forother expenditures.

Tax deposits of RM85.000 are made each quarter, beginning in March.

The company's cash balance on December 31, 2007 was RM80.000 and a minimum balance of RM50.000 must be maintained at all times. Any short term financing needed to maintain the minimum cash balance should be paid off in the month following the month of financing with an annual interest rate of 12% per annum.

Prepare a cash budget for AF Sdn. Bhd. for the first four (4) months of 2008. (20 marks)