Question (30 marks) The following data relate to the operations of Bantal Factory, a wholesale distributor of consumer goods: i. Actual and budgeted sales data: ii. The gross margin is 25% of sales. iii. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. iv. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. v. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. vi. Monthly expenses are as follows: commissions - 12% of sales, rent - RM2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is RM900 per month (includes depreciation on new assets). vii. Equipment costing RM1,500 will be purchased for cash in April. viii. Management would like to maintain a minimum cash balance of at least RM4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of RM1,000 at the beginning of each month, up to a total loan balance of RM20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Required: a. Prepare a cash budget for April till June. In the process of preparing cash budget, you are required to support with the following: - Schedule of expected cash collections (April till June) - Merchandise purchase budget (April till June) (18 marks) b. Self-imposed budget is one of the process in the budgeting process. Briefly explain what is a self-imposed budget. Discuss 2 major advantages of this self-imposed budget and what caution must be exercised in their use of this self-imposed budget. (12 marks)