Nielser Plc has engaged a consultant following the approval by the Board of Directors. The Consultants prepared the following information for the projected year for 2020. Nielser Plc, which manufactures Spectacles, will have an expected unit sales increased by 5% in quarter 1, 10% in Quarter 2, 7% in Quarter 3 and 4% in Quarter 4.

i. It is expected that due to fluctuating demand during the year the Price/ Unit will be at K2,500 per Unit in the 1st and 2nd Quarters, while the price will be expected to increase to K4,500 per Unit in the 3rd and 4th Quarters. ii. At the beginning of the year for 2020 (Jan.) It is expected that the unit sales will be 2,500 units. iii. Assume that Nielser Plc that sells its Spectacles to selected retailers and that out of each quarters sales, 70% is collected in the 1st Quarter of the sale; 28% is collected in the following quarter; and 2% is bad debt. iv. Assume accounts receivable at the beginning of the year stood at K2,500 (all the funds to be received in the first quarter).

Required: a). Calculate Nielser Plc sales budget for one year on quarterly basis. 15 Marks b). What will be the amount of debtors at the end of Dec., 2020 whose amount will be received in the 1st quarter of 2021? 5 Marks c). What will be expected amount of bad debts (total) at the end of 2020) (Dec.? 4 Marks d). How will Nielser Plc Accountant treat the Bad debts figure when preparing the cashflow statement in 2021? and explain why it will be treated in this manner