Assignment

Organization: Last year, the group turnover was 300 million with 20% deriving from non UK markets, principally in Middle East.

Role: You have recently been appointed as a trainee accountant to their UK SME (small and medium enterprises) unit, to offer accountancy and financial services to SMEs whose turnover ranges from 0.5 million to 15 million. As part of your ongoing training, you have been asked to undertake some activities.

the founder of the business is investing 100,000 On capitol and has also secured a business loan of 50,000 pounds.

You are now to prepare a Memorandum) that includes the following this sections:

Production of a 12-month cash budget in excel using the data below

Millie and Mike decided to start an Airbnb business together. They have rented a 3-bedroom house to start offering accommodation to holiday makers. They enter into a partnership, with each of them investing 50,000 into the business and they decided to take out a joint business loan of 50000 from the bank. Their revenues and expenses for the 1st 6 months are:

Revenues:

Millie and Mike expect to sell 75 (25 nights*3 rooms) room nights per month @50 per night initially. Breakfast: 20 per room each day on average

Main expenses associated with the start-up in the 1st 6 months are:

Furniture and Refurbishment 5000 (month 1)

Marketing 400 per month Legal and accounting costs 1000 (in month 1) 600 (in month 6) and 600 in month 12

Food and other supplies 600 per month. It is assumed that suppliers will allow

Millie and Mike 30 days to pay for these costs

Rent and rates per month 1200 in the 1st 6 months.

Part time labour 500 per month. These will be paid in the month incurred. Utility bills of 450 will be paid every 3 months.

Owners will take a salary of 500 each per month whilst the business is established.

Other costs of 300 per month have been assumed

From October onwards the following change will take place

Room tariff will reduce by 10%( from 50 to 45) which is expected to increase occupancy by 10% (from 25 nights to 28 nights)

Rent and rates per month will go up by 5%

Cost of food supplies will go down by 10% and marketing cost will reduce by 5% every month

Utility bills paid every quarter to go up by 50% after September Other costs to reduce by 10%

Question 1: Produce Production of a 12-month cash budget in excel?

Question 2: Produce an Income statement and statement of financial position?