Part A: Income Statement and Balance Sheet
Laura Golarsa’s Asset and Liabilities as at June 30 are outlined in the post-closing trial balance below.
|Cash at Bank||$2,700.00|
|Inventory (at cost)||$4,000.00|
|Plant & Equipment||$6,600.00|
|Accumulated Depreciation: Plant & Equipment||$2,640.00|
|Accumulated Depreciation: Motor Vehicles||$4,500.00|
|Land & Buildings||$225,000.00|
|Accrued Expenses Payable||$530.00|
|Capital: Laura Golarsa||$200,000.00|
- Laura Golarsa estimates that her sales for the next three months will be as follows:
Selling price is firmly established a cost plus 75% Markup, with 80% of sales on credit.
- Actual and estimated inventory balances are as follows:
|June 30 (actual)||$4,000|
|July 31 (estimated)||$4,800|
|August 31 (estimated)||$4,500|
- All purchases are made for cash and take advantage of 5% trade discount.
- Expenses are:
|Marketing||15% of Sales|
|General & Administration||5% of Sales|
- At 1 July, accrued motor vehicle running expenses payable amounted to $530. These expenses are $250 plus 1% of sales and are paid in the following month. At the end of the quarter, September’s motor vehicle running expenses will be accrued.
- Motor Vehicles are depreciated at 20% per annum and Plant & Equipment at 10% per annum.
- Financial Expenses: Interest payable is $1,850 per quarter. Additionally, 2% of credit sales are expected to be bad.
Laura forecasts that the following will occur during the quarter ending September 30:
- Laura estimates that she will collect all of the accounts receivable at 30/06, and 75% of the collectible Accounts Receivable arising from the quarter’s sales.
- $11,730 will be paid off the bank loan.
- Laura will deposit additional capital of $21,000 during the period.
Required (Ignoring VAT for this question)
- Prepare a Budgeted Income Statement for the quarter ended 30 September, based on the information provided, clearly showing all component of Cost of Goods Sold.
- Prepare a Budgeted Balance Sheet as at 30 September.
Part B: Statement of Cash Flow
The following budgeted information is provided for the business of Rex’s Fishing Supplies for the year to end 30 June 2014.
|Receipts from Accounts Receivable||$130,800.00|
|Purchase of Shop Fittings||$10,900.00|
|Payment to Accounts Payable||$65,400.00|
|Investment Income Received||$5,000.00|
|Repayment of Bank Loan||$50,000.00|
|Operating Expenses Paid||$43,600.00|
|Drawing by Rex||$30,000.00|
|Cash at Bank 01 July 2013 (Actual)||$15,000.00|
|Cash at Bank 30 June 2014 (Budgeted)||$30,000.00|
(a) Prepare a budgeted Statement of Cash Flows for the year ended 30 June 2014. Rex’s Fishing Supplies is VAT Registered and reports on a cash basis. Net VAT Collected will be remitted to the FRCA during the year.
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