Edit NO 9:08 88 50 Tango Ltd prepares a Cash Budget every quarter. The company is currently preparing the budget for the 3 months starting 1 March 2018 and has compiled the following information: The budgeted bank balance on 1 March 2018 is expected to be 32,000 overdrawn. The expected sales figures for the three months are: Sales. Sales. Mar 2018 000. 280 April 2018 000. 270 May 2018 000 260 In general, 70% of sales are on credit and are paid in the month after the sale. The remaining 30% of sales are for cash. Sales for the month of February 2018 are budgeted to be 250,000. . Raw materials are budgeted at 40% of the monthly sales figure and are paid for in cash in the month of purchase. Wages and salaries are 80,000 per month and are paid during the month in which they are incurred. There is a 5% wage increase planned for April 2018 and subsequent months. Rent is paid quarterly and the next payment of 20,000 is due in March 2018. Other overheads are 42,000 per month and are paid for in the month in which they are incurred. .There is an interim dividend payment due in May 2018 of 45,000 and taxation of 35,000 is due in April 2018. Equipment is due to be replaced in April 2018 at a cost of 45,000. In order to help finance this purchase the company has arranged a bank loan of 20,000 in April 2018. Interest on the loan is payable monthly at a rate of 5% commencing one month after the loan is received Required: a) Produce Tango Ltd's cash budget for the three months ending 31 May 2018. b) Tango Ltd has a bank overdraft limit of 50,000, comment on the closing bank balance in May and suggest two strategies management could employ to avoid this situation arising. ] Tools Mobile View Share O Edit on PC School Tools