The owner of the company plans to prepare a monthly cash budget for the months of October until December 2020. The forecasted sales and purchases for 2020 are as follows:

The credit and collection department estimates collection for 2020 to be 50% within the month of sales and 50% in the following month after the sales. Payment for the above purchases will be made during the month in which the costs of purchase are incurred.

In addition to the above, other estimations show the following:

Prepare a monthly Cash Budge from October until December 2020. State in which month the company is expected to incur deficit or surplus in the cash budget.

October November December Sales RM 240,000 RM 200,000 RM 180,000 Purchases RM 100,000 RM 120,000 RM 140,000 Office Rental per month Income tax payment to be due in December 2020 Cash in hand on 1st November 2020 Monthly minimum cash balance RM 15,000 RM 40,000 RM 20,000 RM35,000