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  1. business
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  3. (b) you are asked to prepare a cash budget using t

(b) You are asked to prepare a Cash Budget using the cash collections ...

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Accounting

(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; $38000.00. Also, in the first quarter direct material cost $40000.00, direct Labour cost $50000.00, Administration expenses
$60000.00.
Advertising $15000.00 and rent $ 20000.00 quarterly.
ii. Equipment was purchased in the first quarter for $50000.00. Equipment purchases increased in the second quarter by 50%.
Equipment purchases in the third and fourth quarter $90000.00 respectively
iii. A dividend of $16000.00 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 $ 65000.00 was borrowed in the first quarter and $30000.00 in the third quarter.
vi. In the fourth quarter the $65000.00 loan with interest of $ 13000.00 were repaid as well as the $30000.00 loan with interest of $6000.00.
vii. Direct materials and Direct labour increased each quarter by $15000 and
10000 respectively.
Viii. Taxes of 30000 to be paid in the third quarter
Prepare a cash budget

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