Question $2(50$ Marks$)$

A$.$ Cove Bhd$,$ a distributor of exercise equipment located in Kuala Lumpur. The management has requested you to prepare the cash budget for the month of June $2024$ the following information is available:

i$.$ The cash balance on $1$ June $2024$ is RM$53,200.$

ii$.$ Actual sales for April and May and expected sales for June are as follows:

$\backslash$table$[[,$April,May,June$],[$Cash sales,RM $75,600,$RM $89,000,$RM $88,200],[$Sales on account,RM $410,000,$RM $574,000,$RM $609,000]]$

Sales on account are collected over a three$-$month period as follows: $30\%$ collected in the month of sale, $50\%$ collected in the month following sale, and $15\%$ collected in the second month following sale. The remaining $5\%$ is uncollectible.

iii. Purchases of inventory will total RM$318,000$ for June. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from May's inventory purchases total RM$172,000,$ all of which will be paid in June.

iv$.$ Selling and administrative expenses are budgeted at RM$525,000$ for June, excluding amount, RM$57,700$ for depreciation.

v$.$ A new motor vehicle for the marketing director costing RM$82,000$ will be purchased for cash during June, and dividends totaling RM$12,000$ will be paid during the month.

vi$.$ The company maintains a minimum cash balance of RM$30,500.$ An open line of credit is available from the company's bank to increase its cash balance as needed.

Required:

Calculate the expected cash collections for June.

Calculate the expected cash disbursements for merchandise purchases for June.

Prepare a cash budget for June. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.

$(15$ marks$)$