Below is the information as at the end of accounting year of December 2020:
Details RM
Debtors 23,000
Bank 55,000
Fixed asset at cost 698,000
Accumulated depreciation 98,000
Creditors 48,000
Operating expenses for December 60,000
Sales for December 400,000
Ending inventory 20,000
Retained earnings 120,000

The following additional information was also provided to assist your work.
i) Depreciation is provided at the rate of 5% on cost of non-current assets per month.
ii) Closing inventory is expected to increase by RM2000 in January from December levels. This is expected to increase by the same figure in February from the projected figure in January. It is expected that in March closing inventory is desired to be RM26,000
iii) The company makes a profit of 25% on its sales.
iv) Operating expenses is expected to increase by 10% from that of December in January and this is projected to increase at the same growth rate until March.
v) Sales is projected to grow by 15% per month from December until March.
vi) Debtors figure at the end of the month is desired to be proportional to the sales values.
vii) Creditors value for the three months are expected to be as follows:
January – RM50,000; February – RM46,000; March – RM52,000

REQUIRED:
Prepare the following three-months (January to March 2021) budget as required by the bankers

a) The budgeted statement of financial position/ Balance Sheet

BioGrow Sdn. Bhd is a retail fertilizer to farmers in Jitra. The company has approached its Bankers to provide funding for next year’s operations. In considering their funding application, a three – month master budget has been requested for review by the bankers.
As a freelance accounting service provider, you have been approached by the management as a consultant to prepare the 1st quarter budget for the banker’s consideration for its next year’s (2021) operations.
Below is the information as at the end of accounting year of December 2020:

Debtors 23,000
Bank 55,000
Fixed asset at cost 698,000
Accumulated depreciation 98,000
Creditors 48,000
Operating expenses for December 60,000
Sales for December 400,000
Ending inventory 20,000
Retained earnings 120,000

The following additional information was also provided to assist your work.
i) Depreciation is provided at the rate of 5% on cost of non-current assets per month.
ii) Closing inventory is expected to increase by RM2000 in January from December levels. This is expected to increase by the same figure in February from the projected figure in January. It is expected that in March closing inventory is desired to be RM26,000
iii) The company makes a profit of 25% on its sales.
iv) Operating expenses is expected to increase by 10% from that of December in January and this is projected to increase at the same growth rate until March.
v) Sales is projected to grow by 15% per month from December until March.
vi) Debtors figure at the end of the month is desired to be proportional to the sales values.
vii) Creditors value for the three months are expected to be as follows:
January – RM50,000; February – RM46,000; March – RM52,000

REQUIRED:
Prepare the following three-months (January to March 2021) budget as required by the bankers.
a) The Cash Collection Schedule for sales
b) The Cash Payment Schedule for purchases
c) The budgeted income statement
d) The budgeted statement of financial position/ Balance Sheet
e) The cash budget
f) Identify TWO (2) possible risks that may cause the company not achieving their targeted profit for the first quarter of 2021.