Aqua Pharmacy sells a product that has a highly seasonal variation with peak sales occurring in the third quarter. The following information was given for expected sales data for the coming year 2020. The product of the pharmacy sells for $6.00 per unit. Budgeted sales for the next four quarters are as follows: -

2020 Quarters 1 2 3 4 Budgeted Sales in Units 50 000 70 000 120 000 60 000

Sales are collected in the following pattern: 60% in the quarter the sales are made and the remaining 40% in the following quarter. On January 1, 2020, the records showed 60 000 in accounts receivables as well as the following information.

i. Cash balance on January first was $38 000.00. Also, in the first quarter, direct material cost $70 000.00, direct Labour cost $80 000.00, Administration expenses $100 000.00, Taxes $10 000.00, and Advertising $15 000.00.

ii. Equipment was purchased in the first quarter for $50 000.00. Equipment purchases increased in the second quarter by 30%. No other equipment was purchased.

iii. A dividend of $16 000.00 is to be paid in the first quarter and fourth quarter only.

iv. Administration Expenses rose by 25% in the second quarter, 20% in the third, quarter, and 10% in the fourth quarter. The increase in expenses was based on the previous quarter figures.

v. For financing purposes, a loan of $85 000.00 was received in the first quarter and $40 000.00 in the second quarter. vi. In the third quarter the $85 000.00 loan with interest of $3 000.00 were repaid and in the fourth quarter the $40 000.00 loan with interest of $6 000.00 were repaid. vii. Direct materials and Direct labour increased each quarter by $15 000 and 10 000 respectively. viii Rent was charged at $ 20 000.00 quarterly.

Required (i) Sales budget. (ii) Schedule of cash collections (iii) Cash budget