Question 3 (25 Marks) Use the following information which relates to Ada Limited to answer the questions which follow: Information: 1. Cash at bank on 1 January 2021 amounted to R155 000. 2. Projected sales per quarter for 2021: First quarter R450 000 Second quarter R750 000 Third quarter R870 000 Fourth quarter R880 00 Sixty percent (60%) of the sales are for cash and forty percent (40%) are on credit. Cash customers are entitled to a 5% cash discount. 3. Collection of credit sales: 55% of the credit sales are collected in the quarter of the sale. 35% is collected in the following quarter and the balance is written off as a bad debt. 4. Purchases for each quarter are expected to be as follows: First quarter R120 000 Second quarter R125 000 Third quarter R130 000 Fourth quarter R170 000 All purchases are on credit. 70% of the purchases will be paid for in the quarter of purchase and the remaining 30% in the following quarter. 5. Fixed overheads total R180 000 per year and are paid for equally each quarter. Fourth quarter R170 000 All purchases are on credit. 70% of the purchases will be paid for in the quarter of purchase and the remaining 30% in the following quarter. 6. Administrative expenses are paid for in the quarter in which they are incurred and are estimated at a total of R15 000 per quarter. 7. An investment of R100 000 matures on 30 June 2021, and interest of R12 000 will also be received on this date. Required: Prepare the Debtors Collection Schedule for the four quarters of 2021. Prepare the Cash Budget for the four quarters of 2021. Discuss advantages and disadvantages of preparing budgets