equally Valuea. Question 1 (You MUST answer this question). Assume that it is the beginning of June 2020 and Handy Crafts Retailers are preparing their budgets. The information is as follows: Budget 2020 Aug July Sep Actual 2020 May June 25,000 30,000 6,800 7.500 26,000 28,000 20,000 7,000 7.100 6,000 Sales Selling and Administration Purchases Closing Inventories 12,000 15,000 13,000 14.000 10,000 700 500 600 600 300 Depreciation of 500 is included in Administration Expenses. Selling and Administration Expenses are paid in the month of incurrence. 20% of sales are collected in the month of sale, 50% in the month following the sale and the balance is collected in the second month after the sale. 30% of purchases are paid in the month of purchase. 20% of purchases are paid one month after purchase and the balance is paid two months after purchase date. Income Tax is at 30% and it is payable at the end of the year. In the past the company had received a loan from Finance House Bank. The company is paying back the loan on a monthly basis. The monthly instalment is 8000 of which the interest portion is 3.100. Cash at bank at 31/06/2020 is expected to be 1.000 Required: a) Prepare the Budgeted Income Statement for June and July 2020. (40%) b) Prepare the Cash Budget for July 2020. (35%) c) Briefly explain how the impact of the pandemic on businesses would affect a company's planning of its cash budget. You may use an example to support your (25%)