GAP Ltd is a merchandiser. The company has a bank overdraft of $40,000 at the end of March and an overdraft limit of $100,000. The directors are worried about its liquidity situation over the last months. As a result, they have recently decided to review their plans for the next four months of the year 2022.

Sales and purchases are as follows:

	March	April	May	June	July
	(actual)	(expected)	(expected)	(expected)	(expected)
Sales revenue	$340,000	$360,000	$370,000	$350,000	$350,000
Purchases	$210,000	$240,000	$260,000	$260,000	$250,000

a,30% of sales are for cash, and the remainder of sales are on credit terms and collected in the following month.

b, Suppliers are paid one month in arrears.

c, Staff members will be employed at a pay of $24,000 a month plus 10% of sales revenue which is paid one month in arrears.

d, Utilities are forecasted to be $7,000 per month and paid in the month incurred.

e, Rent is $20,000 per month payable quarterly in advance during the first week of each quarter.

f, Insurance is $6,000 per month payable annually in advance during the first week of each year.

g, The company intends to launch an advertising campaign at a cost of $50,000 in May which is paid one month in advance.

h, The company plans to buy new equipment in April for $30,000 and in June for $40,000 cash.

Requirment;

1. Using the spreadsheet, prepare a monthly cash budget for the second quarter.

2. Discuss the benefits and limitations of budgets and budgetary planning and control for GAP.

3. Justify budgetary control solutions and their impact on organisational decision-making to ensure efficient and effective deployment of resources in GAP