Question 2 (Total: 25 marks) Styles and Malik have taken up a franchise arrangement with Borenos Chicken. The business has a bank overdraft limit of RM40,000. The following are the forecast figures for the next six (6) months. Month Purchases Sales Wages & Salaries Overhead RM RM RM RM November 40,000 85,000 20,000 15,000 December 50,000 110,000 20,000 15,000 January 30,000 58,000 40,000 18,000 February 40,000 75,000 20,000 18,000 March 60,000 120,000 25,000 20,000 April 60,000 120,000 25,000 20,000 Additional information: (1) A franchise payment is made of RM6,000 per month. (2) 50% of the sales are for cash, 25% is received one month later and 25% two months later. (3) Purchases are paid one month later. (4) Wages are paid for in the month incurred. (5) Overheads do not include: a. Rent RM4,000 per month paid three monthly in advance, in December, March, June and September of the following year. b. Depreciation RM6,000 per month. C. All other overhead is paid one month later. (6) Capital expenditure payments will be: a. February RM8,500 b. March RM2,250 C. April RM5,000 (7) A cash balance of RM2,250 is forecast at 1 January. You are required: (a) to prepare the Cash Budgets for January, February and March. (20 marks) (b) to comment briefly on the position of the Cash Budgets at the end of March