URGENT

Please Reply ASAP!!!

Question 3

Megah Sdn Bhd prepares monthly cash budgets. Relevant data from operating budgets for 2020 as follows:

	January RM	February RM
Sales	320,000	400,000
Direct materials purchases	80,000	110,000
Direct labour	85,000	115,000
Manufacturing overhead cost	60,000	75,000
Selling and administrative expenses	75,000	80,000

All sales are on credit. Collections are expected to be 60% of the sales in the month of sale, 30% in the first month of the sale and 10% in the second month following the sale. Thirty percent of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the following month of the purchase. All other items are paid in the month they are incurred. Depreciation has been excluded from manufacturing overhead and selling and administrative expenses.

Additional information:

1. Credit sales: November 2019, RM200,000; December 2019, RM280,000

2. Purchases of direct materials: December 2019, RM90,000

3. Other receipts:

- January: Collection of 31 December 2019, interest on investment RM3,000

- February: Proceeds from sales of motor vehicles RM5,000

4. Other disbursement:

- February: Payment of RM20,000 for furniture and equipment.

The companys cash balance on 1 January 2020 is expected to be RM60,000. The company wants to maintain a minimum cash balance of RM50,000.

Required:

a) Prepare a schedule of cash collections from customers for the month of January and February.

(3 marks)

b) Prepare a schedule of cash payments for direct materials purchases for the month January and February.

(3 marks)

c) Prepare a cash budget statements for the month of January and February 2020. Indicate in the financing section any borrowing that will be necessary during the month.

(9 marks)