The Kejore Company has the following information available:

MonthBudgeted Sales

MayRM84,000

June72,000

July74,000

August76,000

September78,000

October78,000

Budgeted Operating Expenses Per Month

WagesRM12,600

Advertising27,200

Depreciation19,000

Rent20,400

Freight-out20% of sales

Sales commission5% of sales

Other Expenses and Revenue

Dividends paid in July60,000

Purchase equipment for cash in August4,500

Rent received (August and September)100,000

The cost of goods sold rate is 65% and the desired ending inventory level is 25% of the next month's cost of sales. Fifty percent of purchases will be paid on the month purchases and remaining in next month.

Credit sales are 80% of total sales. Collections of credit sales are 40% in the month of sale, 50% in the month after sale and 10% two months after sale. No uncollectible accounts are expected.

Kejore Company wants to maintain a minimum cash balance of RM10, 000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Interest of 1% per month is paid in cash at the end of each month debt is outstanding. Borrowing and repayment is carried out in multiples of RM1, 000. Cash balance at 1 July is RM200, 000.

Required:

a) Construct a schedule of cash collections for July, August and September [9 marks]

b) Construct a purchases and cost of goods sold budget for July, August and September.

[10 marks]

c) Construct a schedule of cash disbursements for operating expenses for July, August and September. All cash expenses are paid when incurred.[7 marks]

d) Construct a cash budget for July, August and September.[14 marks]