Format:-10pt Times New Roman-CHICAGO 16th Ed. Referencing style + In-text citation (not footnote)-minimum of 10 academic scholarly references -Please use suitable headings -Definition/explanation of working capital to be included as a short introduction-must be a min 1400 words, max 1500 words (excluding in-text citation, reference list, headings)-Please distribute the number of words appropriately-Use appropriate tables/graphs Case Study on BudgetingBased on the information provided on Blackboard and your own individual research, answer the following questions on budgeting:1. Discuss the difference between strategic planning and operational budgeting. (10marks)2. Discuss the benefits to an entity in preparing a budget for the coming financial year. (15marks)3. State the different types of budgets that may be prepared to construct the master budget. (15marks)4. List and discuss four general problems with, or limitations of, budgetary control through variance analysis. (20marks)5. Practical Problem: Road Runner (see details below): prepare cash budget and answer the following questions (show all complete step-by-step workings and tables/graph): (20marks)a. Explain to the owner of Roadrunner Food Services why a cash budget is important for the business.b. Prepare a cash budget for the months of November and December 2016.c. Ross would like to purchase a new vehicle in December. Based on your cash budget what recommendations would you make regarding this purchase? The cost of the vehicle is $40 000.Case details:The accountant for Roadrunner Food Services is preparing its cash budget for November and December 2016. The accountant, Ross Leon, has collected the following information regarding expected credit sales and expected purchases of inventory on credit: September October November DecemberCredit sales $170 000 $180 000 $190 000 $210 000Credit purchases 125 000 95 000 140 000 155 000 Ross has analysed the accounts receivable records for the past few years and has determined that customers normally pay 60 per cent in the month of sale, 30 per cent in the month following the sale, and 8 per cent in the second month following sale. The remaining 2 per cent is considered a bad debt and uncollectable.Foods R Us, the only supplier to Roadrunner Food Services, offers a 4 per cent discount if its customers pay by the 15th day of the following month. Ross always takes advantage of this discount. Cash payment for operating expenses are expected to be $85 000 per month for November and December. The expected cash balance on 1 November is $10 000.Format:-10pt Times New Roman-CHICAGO 16th Ed. Referencing style + In-text citation (not footnote)-minimum of 10 academic scholarly references-Please use suitable headings-Definition/explanation of working capital to be included as a short introduction-must be a min 1400 words, max 1500 words (excluding in-text citation, reference list, headings)-Please distribute the number of words appropriately-Use appropriate tables/graphsCase Study on BudgetingBased on the information provided on Blackboard and your own individual research, answer the following questions on budgeting:1. Discuss the difference between strategic planning and operational budgeting. (10marks)2. Discuss the benefits to an entity in preparing a budget for the coming financial year. (15marks)3. State the different types of budgets that may be prepared to construct the master budget. (15marks)4. List and discuss four general problems with, or limitations of, budgetary control through variance analysis. (20marks)5. Practical Problem: Road Runner (see details below): prepare cash budget and answer the following questions (show all complete step-by-step workings and tables/graph): (20marks)a. Explain to the owner of Roadrunner Food Services why a cash budget is important for the business.b. Prepare a cash budget for the months of November and December 2016.c. Ross would like to purchase a new vehicle in December. Based on your cash budget what recommendations would you make regarding this purchase? The cost of the vehicle is $40 000.Case details:The accountant for Roadrunner Food Services is preparing its cash budget for November and December 2016. The accountant, Ross Leon, has collected the following information regarding expected credit sales and expected purchases of inventory on credit:SeptemberOctoberNovemberDecemberCredit sales$170 000$180 000$190 000$210 000Credit purchases125 00095 000140 000155 000Ross has analysed the accounts receivable records for the past few years and has determined that customers normally pay 60 per cent in the month of sale, 30 per cent in the month following the sale, and 8 per cent in the second month following sale. The remaining 2 per cent is considered a bad debt and uncollectable.Foods R Us, the only supplier to Roadrunner Food Services, offers a 4 per cent discount if its customers pay by the 15th day of the following month. Ross always takes advantage of this discount. Cash payment for operating expenses are expected to be $85 000 per month for November and December. The expected cash balance on 1 November is $10 000.
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