Kaume Enterprises (KE) is a business that sells sweets. The company buys the sweets from producers and then packages them into small assorted packs. The business has gained popularity due to its assorted sweets that customers are not able to get such mixes elsewhere. KE is in the process of preparing budgets for the first quarter of 2024 and the following information has been made available. 1. The cash balance on 1st January 2024 is expected to amount to N$14 000. 2. Budgeted monthly sales units for the first four months of 2023 are as follows: Month Units (packets) January 12 000 February 18 000 March 15 000 April 14 000 3. KE will charge each packet of sweets for N$5 for January rising to N$7 in March 2024. Sales are 30% cash and 70% credit. Credit sales are collected over a three-month period, 10% in the month of sale, 60% in the month following the sale and 30% in the second month following the sale. Total sales revenue in November 2024 and December 2024 amounts to N$45 000 and N$54 000 respectively. 4. Cost of sales is expected to be 75% of sales revenue each month. 5. The business maintains its closing inventory levels at 60% of the following months cost of sales. Inventory at the beginning of January is expected to amount to N$27 000. 6. 65% of inventory purchased is paid for in the month of purchase and the remaining 35% is paid for in the month following purchase. At the 31st December 2023 amounts owed for purchases were N$13 800. 7. A loan of N$40 000 is expected to be received in January 2024. The company will repay this loan evenly over 20 months commencing in February. 8. A motor vehicle which cost N$8 000 when purchased second hand three years ago is expected to be sold in March 2024 for N$3 300. The expenses associated with this sale are expected to be N$300. 9. Equipment costing N$12 000 will be purchased in January 2024 and paid for in February. This equipment will be depreciated on a straight-line basis over three years. 10. Operating expenses are paid as incurred. These have been estimated as follows: January 12 800 February 18 900 March 14 000 The above figures include depreciation on existing assets (excluding planned purchases/disposals detailed above) of N$2 000 per month.

2.1 Calculate the purchases requirement for each month from January 2023 to March 2023. 2.2 Prepare a monthly cash budget for January, February and March 2023. 2.3 Outline any one potential benefits to KE from the preparation of the cash budget