I need to answer for two questions, one is about the manufacturing account, and the other one is about cash budget. Thanks!

11 Additional information CL pic is a manufacturing business. Goods are transferred from the factory at a fixed percentage profit, which has remained unchanged for some years. The directors provided the following CL pic has the opportunity to buy in finished goods at a cost 5% lower than the cost of each unit it information for the year ended 31 December 2017. manufactures. (d) Advise the directors whether or not they should take this opportunity. Justify your answer. [4] Revenue 1 820 000 Prime cost 780 000 Factory overheads 152 000 Distribution costs 283 800 (0) () State what is meant by the term "prime cost". [1] Administrative expenses 343 100 47 100 (ii) State one example of a cost which would be included in prime cost. [1] Finance charges Work in progress at 1 January 2017 17 000 Inventory of finished goods at transfer price at 1 January 2017 126 000 (ii) State one example of a cost which would be included in factory overheads. (1] Work in progress at 31 December 2017 25 000 Inventory of finished goods at transfer price at 31 December 2017 96 000 [Total: 25] The following information is also available: 1 The provision for unrealised profit account was as follows: CL plc Provision for unrealised profit account 2017 2017 S Dec 31 Income statement 5000 Jan 1 Balance bid 21 000 Balance cid 16 000 21000 21000 2018 Jan 1 Balance bid 16000 2 Total rent for the business was $100000 for the year. All of this had been included in administrative expenses. However, 50% of it related to the factory. 25% to the offices and 25% to the distribution centres. 3 The taxation charge for the year was $39400. Answer the following questions in the Question Paper. Questions are printed here for reference only. (a) Calculate the percentage of factory profit used by the company. [3] b) Prepare the manufacturing account for the year ended 31 December 2017 in as much detail as possible. [4] (c) Prepare the income statement for the year ended 31 December 2017. [11]Stanley has been operating as a sole trader for many years with a year end of 31 December. He is preparing a cash budget and provides the following information for the three-month period from July 2019 to September 2019. 1 Total income of $120 000 from trade receivables for credit sales will be collected in equal amounts over the three-month period. 2 Cash sales are expected to be 25% of the cash collected each month from credit sales. There will be no trade receivables at 1 July 2019. 3 Total credit purchases of $75 000 will be paid for in equal amounts over the three-month period. 4 Cash purchases are expected to be 20% of the cash paid each month for credit purchases. There will be no trade payables at 1 July 2019. 5 The bank balance on 1 July 2019 is expected to be $3500. 6 Stanley is expected to receive a bank loan of $30000 on 1 August 2019. Interest will be payable monthly in arrears at 5% per annum. No capital will be repaid until July 2020. 7 New machinery costing $60 000 will be purchased by cheque on 15 August 2019. Stanley's policy is to depreciate machinery at 25% per annum using the straight-line method. A full year's depreciation is charged in the year of acquisition. 8 Stanley rents part of his business premises for $6000 per annum and receives this rental income on a monthly basis. 9 General expenses are paid for in the month following that in which they are incurred. General expenses incurred in June amounted to $6000. These are expected to increase by 5% in July 2019 and a further 5% in August 2019. 10 Stanley makes annual cash drawings of $15000 in equal instalments on 1 January and 1 July each year. Answer the following questions in the Question Paper. Questions are printed here for reference only. (a) Explain three advantages of preparing a cash budget. [6] (b) Prepare the cash budget for each of the three months beginning on 1 July 2019. [14] Additional information Stanley has calculated the payback period for the new machine as 4 years. He has been advised to evaluate his purchase using the net present value (NPV) method. (c) Discuss how the NPV method might give Stanley a more accurate evaluation compared to the payback method. [5] [Total: 25]