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)||$5,000|
|August 31 (estimated)||$6,500|
- All purchases are made for cash and take advantage of 2.5% trade discount.
- Some Cash Expenses are:
|Marketing||10% of Sales|
|General & Administration||5.5% of Sales|
- At 1 July, accrued motor vehicle running expenses payable amounted to $530. These expenses are $250 plus 2% 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, 2.5% 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 80% of the collectible Accounts Receivable arising from the quarter’s sales.
- $15000 will be paid off the bank loan.
- Laura will deposit additional capital of $25,000 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.
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