Question

(b) You are asked to prepare a Cash Budget using the cash collections in 2020 for the JJ Pharmacy. The following information is available. i. Cash balance at January 1, 2020; $38 000.00. Also, in the first quarter direct material cost $40 000.00, direct Labour cost $50 000.00, Administration expenses $60 000.00. Advertising $15 000.00 and rent $ 20 000.00 quarterly. ii. Equipment was purchased in the first quarter for $50 000.00. Equipment purchases increased in the second quarter by 50%. Equipment purchases in the third and fourth quarter $90 000.00 respectively iii. A dividend of $16 000.00 and marketing expenses $4000.00 to be paid quarterly. iv. Administration Expenses rose by 25% in the second quarter, 20% in the third quarter and 10% in the fourth quarter. v. For financing purposes, a loan of $ 65 000.00 was borrowed in the first quarter and $30 000.00 in the third quarter. vi. In the fourth quarter the $65 000.00 loan with interest of $ 13 000.00 were repaid as well as the $30 000.00 loan with interest of $6 000.00. vii. Direct materials and Direct labour increased each quarter by $15 000 and 10 000 respectively. Viii. Taxes of 30 000 to be paid in the third quarter Prepare a cash budget

          (b) You are asked to prepare a Cash Budget using the cash collections   
         in 2020 for the JJ Pharmacy. The following information is available.
i. Cash balance at January 1, 2020; $38 000.00.  Also, in the first quarter direct material cost $40 000.00, direct Labour cost $50 000.00, Administration expenses
 $60 000.00.
Advertising $15 000.00 and rent $ 20 000.00 quarterly.
ii. Equipment was purchased in the first quarter for $50 000.00.  Equipment purchases increased in the second quarter by 50%. 
Equipment purchases in the third and fourth quarter $90 000.00 respectively
iii. A dividend of $16 000.00 and marketing expenses $4000.00 to be paid quarterly.
iv. Administration Expenses rose by 25% in the second quarter, 20% in the third 
      quarter and 10% in the fourth quarter. 
v. For financing purposes, a loan of $ 65 000.00 was borrowed in the first quarter and $30 000.00 in the third quarter. 
vi. In the fourth quarter the $65 000.00 loan with interest of $ 13 000.00 were repaid as well as the $30 000.00 loan with interest of $6 000.00.
vii. Direct materials and Direct labour increased each quarter by $15 000 and
     10 000 respectively.
Viii.  Taxes of 30 000 to be paid in the third quarter
Prepare a cash budget

Added by Sofia C.

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