a. Panda Ltd is a mature company that has been operating in a stable market for a number of years. The company has a cash balance of 40,500 at the beginning of May. The directors require a forecast of the firm's cash balance at the end of May, June and July.

The following information is available:

(1) Salaries are paid at the end of each month.

(2) Suppliers allow one month's credit.

(3) Fixed overheads are paid one month in arrears and include a charge for depreciation of 7,500 per month.

(4) Credit sales are settled 50% in the month of sale and 50% in the following month.

Month	Purchases	Salaries	Fixed	Credit	Cash
			overheads	sales	sales
March	82,800	13,500	45,000	111,000
April	79,100	13,500	45,000	123,000
May	80,000	14,250	45,000	120,000	30,000
June	83,500	14,250	48,000	135,000	33,000
July	82,750	15,000	48,000	150,000	37,500

Required:

1. Prepare a cash budget for each of the months ending May, June and July.

2. Given the forecast cash balances over the months of May to July, comment on two actions the directors could take.

3. Describe the role of budgets in organisational control.