TUTORIAL-CASH BUDGET Question October 2018 Ruby Catering Supply sells various equipment and supplies to restaurants in the local and surrounding communities. The company's executive, Mr. Amer Shah, has requested your help in preparing a cash budget for the month of June. Mr. Amer Shah accumulated the following information for you: i. The cash balance at June 1 was estimated to be RM60,000. ii. Actual sales of April and May and budgeted sales for June are as follows: April (RM) May (RM) June (RM) Cash sales 99,000 93,000 105,000 Credit sales 180,000 240,000 3000.000 Total sales 279,000 33,000 405,000 iii. Credit sales are collected over a two-month period. With 60% being collected in the first month and the remainder being collected in the second month. iv. Inventory purchased is expected to be RM210,000 in June. The company pays for inventory purchases in the month following the purchase. The balance of May's purchase is RM432,000. v. Selling and administrative expenses are budgeted to be RM84,000 for June. Of that amount, 50% is depreciation. vi. Equipment costing RM90,000 will be purchased in June in cash. vii. Dividends in the amount of RM21,000 will be paid. viii. The company wants to maintain a minimum cash balance of RM60,000 and has set up a line of credit at the local bank that can be used to cover any shortage. If the company must borrow, the loan will be made at the beginning of the month and any repayment will be made in the following month.