How would I need to approach this question? Question 5.1.1.1

* 0 100% 7:51 am 4 589764658315... . . . QUESTION 5 (30 marks) (36 minutes) This question consists of two separate parts, both of which must be answered. PART 5.1 (16) Recline (Pty) Lid buys and sells couches. The couches are of the same fabric and quality and cost the same. . The sales budget for the forthcoming financial year ending 31 December 2021 is as follows: Quarter 1 Quarter 2 Quarter 3 Quarter 4 R410 000 R472 000 R600 000 R432 000 The company maintains sufficient inventory to cover 50%% of the next quarter's sales. For the first quarter, assume the same rules were followed for ending inventory in the previous year. . The selling price of couches is determined as 60% mark-up on cost. The expenses for the year are estimated as follows: R Salaries . 420 000 Insurance 9 600 Rent .. 36 800 Miscellaneous 62 400 These expenses are incurred evenly throughout the year. . Commission is paid at 4%% of the sales. REQUIRED: 5.1.1 Prepare the following budgets for quarters 1 and 2 (use separate columns for each quarter- no forals are required: 5.1.1.1 Merchandise purchase budget (6) 5.1.1.2 Expenses budget. (6) 5.1.2 List the four underlying budgeting principles. (4) PART 5.2 (14) You were recently appointed as an assistant to the financial manager of Recline (Pty) Lid. Recline (Pty) Lid has considerable cash reserves and the financial manager, Ms Dube, is considering making an investment in the equity shares of either Snow Limited or Rain Limited. Ms Dube has provided you with a ratio analysis based on the financial statements of the two companies for the last five years (see below). Ratio Company 2015 2016 Gross profit margin (3) Snow 42 39 Rain Net profit margin (%) Snow Rain Retum on equity(s Snow Rain Quick ratio Snow Rair 20