Question 2 - 15 Marks You are the head of Budget department of the Ministry of Trade and Industry. The Ministry intends to prepare the budget for 2021 fiscal year and have decided to use 2020 budget as a base. Below is the detail of 2020 Budget: Note Reveme Compensation of Employees Goods and Services 33,000.00 Internet payment 700.000 As 4 40,000,000 Ghe Notes to Accounts to the budget Gle 2 Comp3.che OP 3. T. . A. R. In the preparation of the budget for 2021, the following assumptions are made: i) The Ministry has just introduced a new equipment and as a result, it is hoped that the IGF would increase by 60% However, there would be cut in the government Grants by GH 19,600,000 ii) ii) Established post salary would increase by GH5,920,000 whereas non-established post salaries would increase to GH 6,960,000, meanwhile all forms of allowances would increase by 25% iii)iii) With the introduction of the new equipment utility cost would increase to GH12,700,000, repairs cost would also increase by 20%, and training and seminar cost would also increase to GH427,820,000. iv) The Ministry expects to acquire a new equipment which is expected to increase the equipment cost by GH150,000,000 Required: a) Using the 2020 Budget as a base and assumptions made, prepare the Budget for 2021 fiscal year. (9 Marks) b) i. Identify and explain the type of Budget approach used by the Ministry in the Budget preparation (3 Marks) ii. Explain THREE (3) merits and THREE (3) demerits of the Budget approach adopted in the preparation of the 2021 Budget (3 Marks) Question 2 - 15 Marks You are the head of Budget department of the Ministry of Trade and Industry. The Ministry intends to prepare the budget for 2021 fiscal year and have decided to use 2020 budget as a base. Below is the detail of 2020 Budget: Note Reveme Compensation of Employees Goods and Services 33,000.00 Internet payment 700.000 As 4 40,000,000 Ghe Notes to Accounts to the budget Gle 2 Comp3.che OP 3. T. . A. R. In the preparation of the budget for 2021, the following assumptions are made: i) The Ministry has just introduced a new equipment and as a result, it is hoped that the IGF would increase by 60% However, there would be cut in the government Grants by GH 19,600,000 ii) ii) Established post salary would increase by GH5,920,000 whereas non-established post salaries would increase to GH 6,960,000, meanwhile all forms of allowances would increase by 25% iii)iii) With the introduction of the new equipment utility cost would increase to GH12,700,000, repairs cost would also increase by 20%, and training and seminar cost would also increase to GH427,820,000. iv) The Ministry expects to acquire a new equipment which is expected to increase the equipment cost by GH150,000,000 Required: a) Using the 2020 Budget as a base and assumptions made, prepare the Budget for 2021 fiscal year. (9 Marks) b) i. Identify and explain the type of Budget approach used by the Ministry in the Budget preparation (3 Marks) ii. Explain THREE (3) merits and THREE (3) demerits of the Budget approach adopted in the preparation of the 2021 Budget