Question 1 (You MUST answer this question). Assume that it is the beginning of June 2020 and Handy Crafts Retailers are preparing their budgets. The information is as follows: Aug Actual 2020 May 25,000 6,800 Budget 2020 June July Sep 30,000 26.000 28.000 20,000 7,500 7,000 7.100 6,000 Sales Selling and Administration Purchases Closing Inventories 12,000 15,00013, 00014, 000 | 10.000 700 500 600 600 300 The Question Continues TURN OVER 2 Depreciation of 500 is included in Administration Expenses. Selling and Administration Expenses are paid in the month of incurrence. 20% of sales are collected in the month of sale, 50% in the month following the sale and the balance is collected in the second month after the sale. 30% of purchases are paid in the month of purchase. 20% of purchases are paid one month after purchase and the balance is paid two months after purchase date. Income Tax is at 30% and it is payable at the end of the year. In the past the company had received a loan from Finance House Bank. The company is paying back the loan on a monthly basis. The monthly instalment is 8000 of which the interest portion is 3,100. Cash at bank at 31/06/2020 is expected to be 1.000 Required: a) Prepare the Budgeted Income Statement for June and July 2020. (40%) b) Prepare the Cash Budget for July 2020. (35%) c) Briefly explain how the impact of the pandemic on businesses would affect a company's planning of its cash budget. You may use an example to support your answer (25%) Answer two of the following