Question 1 a) Abigail Acheampong is in the process of preparing budgets for the period October to December 2021. The following information has been provided to assist in the budgeting process: Budgeted monthly sales revenue is as follows: GH October 40,000 November 70,000 December 50,000 January 2022 45,000 Sales are 20% cash and 80% credit. Credit sales are collected over a three month period, 15% in the month of sale, 70% in the month following sale and 15% in the second month following sale. Bad debts of 5% are anticipated on all credit sales. Total sales revenue in August amounts to GH30,000 and Septembers total sales revenue amounts to GH36,000. Cost of sales is expected to amount to 60% of sales revenue each month. The business maintains its closing inventory levels at 75% of the following months cost of sales. Inventory at the beginning of October is expected to amount to GH18,000. 50% of inventory purchased is paid in the month of purchase. The remaining 50% is paid for in the month following purchase. As at 30 September 2021, amount owed for purchases are GH11,700. A grant of GH20,000 is expected to be received in mid-October. A second hand van which cost GH8,000 three years ago is expected to be sold in December 2021 for GH3,000. At this time the expected net book value of the van is GH1,800. Equipment costing GH4,500 will be purchased and paid for in November 2021. The equipment will be depreciated on a straight line basis over three years. Operating expenses are paid as incurred. These have been estimated as follows: GH October 12,800 November 18,900 December 14,600 The above figures include depreciation on existing assets of GH2,000 per month. The cash balance on 1 October is expected to amount to GH8,000 Required: i) Calculate the purchases figure for each month from October 2021 to December 2021. (3 marks) ii) Prepare a cash budget on a monthly basis and in total for the period October 2021 to December 2021. (12 marks) (Total: 20 marks) QUESTION TWO b) The Sales Director has recently attended a course entitled Finance for Non-Accounting Managers. He wants to understand more about a number of management accounting terms that he feels may be relevant to him. Required: Prepare a memorandum explaining and providing examples of the following: i) Activity Based Budgeting ii) Zero Based Budgeting iii) Incremental Budget (6 marks)