four quarters are as follows:- Quarters Budgeted Sales in Units i. ii. iii. iv. V. 1 vi. 2 Sales are collected in the following pattern: 60% in the quarter the sales are made and the remaining 40% in the following quarter. vii. 50 000 70 000 On January 1, 2020, the records showed 60 000 in accounts receivables as well as the followi information. 2020 3 120 000 4 60 000 Cash balance at January first was $38 000.00. Also, in the first quarter direct material cost $70 000.00, direct Labour cost $80 000.00, Administration exper $100 000.00, Taxes $10 000.00 and Advertising $15 000.00. 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. A dividend of $16 000.00 is to be paid in the first quarter and fourth quarter om Administration Expenses rose by 25% in the second quarter, 20% in the third, quarter and 10% in the fourth quarter. The increased in expenses was based on previous quarter figures. For financing purposes, a loan of $85 000.00 was received in the first quarter a $40 000.00 in the second quarter. In the third quarter the $85 000.00 loan with interest of $3 000.00 were repaid in the fourth quarter the $40 000.00 loan with interest of $6 000.00 were repai Direct materials and Direct labour increased each quarter by $15 000 and 10 000 respectively.
four quarters are as follows:- Quarters Budgeted Sales in Units i. ii. iii. iv. V. 1 vi. 2 Sales are collected in the following pattern: 60% in the quarter the sales are made and the remaining 40% in the following quarter. vii. 50 000 70 000 On January 1, 2020, the records showed 60 000 in accounts receivables as well as the followi information. 2020 3 120 000 4 60 000 Cash balance at January first was $38 000.00. Also, in the first quarter direct material cost $70 000.00, direct Labour cost $80 000.00, Administration exper $100 000.00, Taxes $10 000.00 and Advertising $15 000.00. 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. A dividend of $16 000.00 is to be paid in the first quarter and fourth quarter om Administration Expenses rose by 25% in the second quarter, 20% in the third, quarter and 10% in the fourth quarter. The increased in expenses was based on previous quarter figures. For financing purposes, a loan of $85 000.00 was received in the first quarter a $40 000.00 in the second quarter. In the third quarter the $85 000.00 loan with interest of $3 000.00 were repaid in the fourth quarter the $40 000.00 loan with interest of $6 000.00 were repai Direct materials and Direct labour increased each quarter by $15 000 and 10 000 respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PART A
DS 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: -
Quarters
Budgeted
Sales in Units
i.
ii.
iii.
iv.
V.
1
Sales are collected in the following pattern: 60% in the quarter the sales are made and the
remaining 40% in the following quarter.
vi.
2
On January 1, 2020, the records showed 60 000 in accounts receivables as well as the following
information.
vii.
2020
3
50 000 70 000 120 000
4
60 000
Cash balance at 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.
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.
A dividend of $16 000.00 is to be paid in the first quarter and fourth quarter only.
Administration Expenses rose by 25% in the second quarter, 20% in the third,
quarter and 10% in the fourth quarter. The increased in expenses was based on the
previous quarter figures.
For financing purposes, a loan of $85 000.00 was received in the first quarter and
$40 000.00 in the second quarter.
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.
Direct materials and Direct labour increased each quarter by $15 000 and
10 000 respectively.
Transcribed Image Text:viii
Rent was charged at $ 20 000.00 quarterly.
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