Use the background information on the previous page and any other information you believe relevant to answer the following questions. Use the budget template provided . Show ALL workings using formulae in MS Excel. Round your budget calculations (questions 5-7) to the nearest whole dollar.

3. Identify AND explain to Flora TWO (2) benefits of budgeting.

4. Explain the difference between a static budget and a flexible budget AND explain which budget Flora should use to analyse the performance of Floras Fizzy.

3. Identify AND explain to Flora TWO (2) benefits of budgeting.

4. Explain the difference between a static budget and a flexible budget AND explain which budget Flora should use to analyse the performance of Floras Fizzy.

5. Prepare a cash receipts budget for Floras Fizzy for the January March 2021 quarter.

6. Prepare a cash disbursements budget for Floras Fizzy for the January March 2021 quarter.

7. Prepare a summary cash budget for Floras Fizzy for the January March 2021 quarter.

8. Explain to Flora, using specific examples, how a minimum cash balance of $3,000 would benefit her business AND the effect it would have on her cash budget.

Background information: Flora owns and operates Flora's Fizzy, which sells lemon flavoured carbonated drink. Flora is unsure why the business is not doing as well as she thought it would, especially given some recent growth in sales. Her accountant suggested that she start preparing cash budgets for the business. Flora has compiled the following figures: Sales Purchases Wages Selling expenses Depreciation January $87,000 60,900 12,000 6,070 900 2021 Estimates February March $80,000 $93,000 56,000 65,100 12,000 12,000 6,070 6,070 900 900 April $100,000 70,000 12,000 6,070 900 Additional information: The bank balance at December 31, 2020 is expected to be $750. All customers are given 30-day credit terms, however 70 per cent choose to pay cash. Past experience shows that debtors usually settle their accounts according to the following pattern: 80 per cent in the month following the sale 15 per cent in the second month following the sale 5 per cent in the third month following the sale Actual sales figures for 2020 are as follows: October: $80,000 November: $93,000 December: $90,000 Eighty (80) per cent of the purchases of the supplies (lemon syrup, bottles, lids and boxes) are paid for in the month of purchase, with the remainder paid for in the following month. Purchases in December 2020 are $63,000. The annual advertising expense of $840 for the 12-month period from January to December 2021 was paid in December 2020. The monthly advertising amount is included in the selling expenses figure above. New bottle capping equipment will be installed in February 2021 for $7,000 and will be paid for in January Interest of $100 is charged at the end of each quarter for the existing loan, and paid in the first month of the following quarter. Principal repayments are $4,500 per month. Additional cash can be borrowed from the bank monthly at an interest rate of 6.00 per cent per annum. Interest is charged monthly in the month following the borrowing. [Business Name] Cash Receipts Budget for the Quarter ending [Date] Data for Calculatio Quarter Total $ Proportion [Month 1] [Month 2] [Month 3] $ $ $ Cash sales Collections from credit sales: From one month previous From two months previous From three months previous Total cash receipts Month Sales