Make a Budgetary Control Report.

Case study: We Ltd. When Mark left university, he decided to run a business selling and repairing computers. In order to do this, he set up a limited company. WLimited. He planned to deposit 100 in the company's bank account on 1 January 2022 and issue 100 shares, with a nominal value of 1 each. in his own name. He also planned for the company to borrow 3,000 from his father Mark planned to rent premises for his business at 2,000 a month and lease test and IT equipment for 000 a month. He would pay 4,000 for signage and furniture. For each of the rst two months he would spend 1500 on computers for resale and components for repairs. In the third month he hoped to buy 1000 of computers on credit. At the outset. he would hire a technician. at a cost of 2,000 a month, to do the repair work. whilst he mostly dealt with selling and administration. He would pay himself 1 .000 a month in salary and planned to take further income as dividends. He estimated that he would use 200 worth of electricity per month and expected to get the rst bill at the beginning of April. He would pay 1,200 for 12 months' insurance. Other expenses paid for during the rst 3 months would be: per month Rates 333 Utilities (excluding electricity] 300 Advertising 300 Mileage (not deliveries} 250 Each month he hoped to sell computers for 3.00? and charge 2,500 for repairs At the end of 3 months he estimated that he would have inventory, of unsold computers, which would have cost him 10,000 He estimated that wear and tear on the long-ten'n assets of the business would amount to about 000 a year, so they would need replacing after about 5 years (5 1: 000 = 4,000} Datahelp Ltd Cash budget for January-March 2022 Jan Feb Mar Total Cash in Shares 100 100 Loan 8,000 8,000 Sales 8,667 8,667 8,667 26,001 Repairs 2,500 2,500 2,500 7,500 Total 19,267 11,167 11,167 41,601 Cash out Rent 2,000 2,000 2,000 6,000 Leasing of equipment 600 600 600 1,800 Signage and furniture 4,000 Computers/components 7,500 7,500 15,000 Technician 2,000 2,000 2,000 6,000 Mark's salary 1,000 1,000 1,000 3,000 Electricity Insurance 1,200 1,200 Rates 333 333 333 999 Utilities (excluding electricity) 300 300 300 900 Advertising 300 300 300 900 Mileage 250 250 250 750 Total 19,483 14,283 6,783 40,549 Net cash in (216) (3,116) 4,384 1,052 Opening balance 0 (216) (3,332) Closing balance (216) (3,332) 1,052Datahelp Ltd Budget Income Statement for the 3 months to 31 March 2022 f E Sales Revenue: Sale of computers 26,001 Repairs 7,500 33,501 Cost of Sales (Note 1) (18,000) Gross Profit 15,501 Operating expenses: Rent 6,000 Leasing of equipment 1,800 Mark's salary 3,000 Electricity 600 Insurance 300 Rates 999 Utilities (excluding electricity) 900 Advertising 900 Mileage 750 Depreciation 200 (15,449) Operating profit 52 Note 1 Opening inventory 0 Purchases 22,000 Technician salary 6,000 Closing inventory (10,000) Cost of Sales 18,000Datahelp Ltd Budget Statement of Financial Position as at 31 March 2022 ASSETS E Non-Current Assets Fixtures and fittings (Note 2) 3,800 Current Assets Inventory 10,000 Prepaid expense (Note 3) 900 Cash at Bank 1,052 11,952 Total Assets 15,752 EQUITY AND LIABILITIES Equity Share capital 100 Retained profit 52 152 Non-Current Liabilities Loan 8,000 Current Liabilities Trade payables 7,000 Accrued expense 500 7,600 Total equity and liabilities 15,752 Note 2 Fixtures and fittings Cost 4,000 Depreciation -200 Carrying amount at 31 March 2021 3,800 Note 3 Insurance paid 1,200 Insurance for first 3 months -300 Prepaid expense c/f 900Datahelp Ltd Budget Statement of Cashflows for the 3 months to 31 March 2022 E E Cash flows from operating activities Sales 26,001 Repairs 7,500 Rent (6,000) Leasing of equipment (1,800) Computers/components (15,000) Technician (6,000) Mark's salary (3,000) Insurance (1,200) Rates (999) Utilities (excluding electricity) (900) Advertising (900) Mileage (750) Net Cash used in Operating Activities (3,048) Cash flows from investing activities Signage & furniture (4,000) Net cash used in investing activities (4,000) Cash flows from financing activities Issue shares 100 Loan 8,000 Net cash used in financing activities 8100 Net increase in cash and cash equivalents 1,052 Cash and cash equivalents at 1/1/22 0 Cash and cash equivalents at 31/3/22 1,052