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4} a] \"1 Describe the major practical differences between a cash budget and other budgets within a business's budgetary oontrol system. {4 marks} The following Inrormatlon relates to wnyzee Limited In 2131? and comes from its various budgets, management decisions, activities and expectations during the year: I: It has agreed to buy new machinery In July for 2DI],I][}I] and a nance arrangement to pay for It in 5 equal monthly lnstalments, the rst due on the date of purchase. o The machinery attmcts a government grant worth 15% of its purchase price, on evidenoe that the machinery instalments are being made on time. This is expected in 3 equal monthly instalments from August. , Rent payable for their premises is 24,D[} per year, payable quarterly in advance. The next payment is due in July. on Purchases of Raw Materials are budgeted to be 1D,[}I]D per month with a variety of payment terms, but averages out as 4:115. is paid in the current month and iii: in Ihe month afterwards. , Either overheads and expenses are budgeted in each month, as follows: Wages of 5,0, payable In the month earned Depreciation of 150 in July, and 45K! In each following month, applied in the relevant month Electricity, Water and Gas usage of 1,350 each month settled monthly Administration costs of 5% of each months' receipts from sales, and paid in the following month. a Cash sales are treated as fully paid at the time of purchase and Whyzee Ltd.'s standard credit term for Its customers is full payment by the end of the following month. The pattern of sales ls expected to be: a] Explain the Accmals [or Matd'ilng] Concept in relation to the nancial accounts and statements of a business. (4 mane-.1 b} A. business Information report has been obtained on Lucrative Prospects Ltd, a new sales lead. Your Sales Manager is naturally:I keen that credit terms can be agreed as soon as possible, and is very.r interested to learn what the data In the report means and how It helps with the amount opening decision. TASKS for part b] Explain the usefulness of each of the following ratios in reviewing the performance ofei business: i} Current Ratio (2 marks} ll) Acid Test Ratio [2 marks} iii} Receivables Collection Period {2 marks} iv] Pavables Settlement Period {2 marks] v] Inventorv Turnover Rate [2 marks} c] The following data has been extmcted from the business infom'iation report for Lucrative Prospects Ltd. Analvse the changes for each between 2315 and Zill, showing the potential impact upon Lucrative Prospects Ltd in general and making reference to its management of Its working capital In particular. ['5 marksj