SCENARIO 3 KOX Ltd. is a merchandiser. The company has a bank overdraft of $40,000 at the end of December 2022 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 three months of the year 2023. Sales and purchases are as follows: (Unit: $) November December (actual) (actual) January (expected) February (expected) March (expected) Sales revenue 80,000 $100,000 $110,000 $130,000 $140,000 Purchases 40,000 $60,000 $80,000 $90,000 $110,000 Wages 10,000 12,000 16,000 20,000 24,000 Overheads 10,000 10,000 15,000 15,000 15,000 Dividends 20,000 Capital 30,000 expenditures a) 40% of sales are for cash, the remainder of sales are on credit terms and collected in 2 months after the month of sales. b) Purchases are paid in the month following the purchases. c) 75% of wages are paid in the current month and 25% are paid in the following month. d) Overheads are paid in the month after they are incurred. e) Rent is $10,000 per month payable quarterly in advance during the first week of each quarter. 5 Dividends are paid 3 months after they are declared. g) Capital expenditures are paid 2 months after it is incurred. 1. Using spreadsheet, prepare a monthly cash budget for the first quarter of 2023. 2. Discuss the benefits and limitations of budgets and budgetary planning and control for KOX. 3. Identify corrective actions to problems revealed by budgetary planning and control for effective organisational decision making in KOX. 4. Justify budgetary control solutions and their impact on organisational decision making to ensure efficient and effective deployment of resources in KOX.