You have been approached by a recently established business Kimeo . The business is seeking
Question:
You have been approached by a recently established business Kimeo The business is seeking a loan from Matatizo Bank who are prepared to provide overdraft facilities. Before approval is granted, maximum amount of overdraft is required together with its respective timing. The company has given you the following facts and forecasts i Trading will start on March when TS cash will be introduced.
ii Business premises costing TZS including rates of March will be paid for at the start of trading. A mortgage of the business premises has been negotiated for the sum of TZS receivable on March This amount is to be repaid over two years at quarterly intervals by equal instalments of capital plus interest at the rate of on balance outstanding at the end of each quarter. The first repayment plus interest will be made on June iii. A part of the premises will be let on a five year tenancy at TZS per calendar month including property taxes payable quarterly in advance as from April iv Sales are estimated at TZS per month for the first quarter, TZS per month for the second quarter and thereafter TZS per month. All sales are on credit and will be paid by end of month following that in which sales were made v A minimum stock of goods to the value of TZS will be purchased in March
and will be maintained throughout the period.
vi Accounts payables will be settled in month following that in which goods were supplied.
vii. Gross profit margin on cost is expected to be throughout the period.
viii. Insurance are estimated at TZS yearly payable on March in advance ix Property taxes are estimated to be TZS per annum payable half yearly in advance on April and October.
x Other business expenses are expected to be TZS per month to be paid at the end of the month following that in which they were incurred.
xi Personal drawings are estimated at TZS per month except in months of July and October when additional drawings of TZS in each month will be made Required: Prepare the following: a Monthly cash flow forecast for the period March to December Marks b Forecast Income Statement for the period ending December Marks c Forecast Statement of Financial Position as at December
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett