PREPARE BUDGETS. ACCOUNTING

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ANSWER SHEET Activity 1. -Sales budget (annual): A trading business for the year ended 31 August 2018, has on the following data: . The quarterly sales are based on last year's annual sales of $800 000 but are expected to increase by 10% this year calculate this as a check on the calculations in the budget. The quarterly figures are: o September $190 000 o December $290 000 o March $180 000 o June $220 000 O Annual ? (this should be equal to the total in point 1 above). The sales are 60% cash and 40% on credit. A trading business Sales budget by quarters for the Year ended August 31 2018 Sep.Dec. Mar. Jun. Total s S s S Sales - Cash Sales - Credit %) Total $ Activity 2. Purchases budget: Document a purchases budget for the trading business for the June quarter, 2018, based on the following data: - Monthly sales are shown in the following budget. If the mark-up margin is 52%, calculate the decimal to be used to determine the cost price of the sales. The purchases are all made on credit. . The opening stock for April is $22 200. The closing stock for each month is equal to the cost price of the following month's sales with the sales for July expected to be $78 000 Monthly sales are shown in the following budget. The calculation for the mark-up is as follows: A trading business Purchases budget for the June quarter 2018 Apr May Jun. Total $ $ S s Boles 80 000 80 000 80 000 240 000 Sales cost (XX%) Purchases idd Closing stock Less Opening stock Total purchases $ Activity 3. Income Budget (Service): Complete the following income budget by quarters for an accounting services provider year ended 30 June 2018, based on the following data: The total income in the previous year was $350 000 but this is expected to increase by 10%. b. The quarterly seasonal pattern is expected to be: September December March June 25% 15% 35% 25%. - Business clients provide 70% of the income; it is expected to be 80% cash with 20% on credit. d Of the total income, 30% comes from individual clients and is all in cash. Answer a. The expected sales for 2018: An accounting services provider Income budget by quarters for the Year ended 30 June 2018 Sepec Marm Total incon 5 S s Business-Cash Bio-Credit Personal-Cash Activity 4. Income statement budget (trading): Complete the following income statement budget for the year ended 30 June 2018 by filling in the blank cells with the question marks (?). The total sales in the annual sales budget for 2018 are $880 000 o The purchases are expected to be 40% of the sales. o Depreciation - Office equip. - the amount of depreciation for the year is based on a cost price of $10000 and a depreciation rate of 15% using straight- line depreciation. o Wages and salaries (administrative) - the amount paid in the previous year was S40 000 but this is expected to increase by 6% in 2018. o Motor vehicle expenses - these were $30 000 in the previous year but are also expected to increase by 6% in 2018. o Bank fees - these were $900 in the previous year but are expected to increase by 9% this year. Calculations: Sales Purchases Depreciation Wages and salaries Motor vehicle Bank fees A trading business Income statement budget for the year ended 30 June 2018 $ $s Sales Less Cost of goods sold Stock at 1 July |35000 Purchases 21 Less Stock at 30 June 3640002 Gross profit 21 Less Operating expenses Administrative Depreciation - Office equip. General 40001 Rent 0 Wages and salaries ? Marketing Motor vehicle expenses Wages and salaries 100000 Financial Bank fees ? Net profit 21 ?? Activity 5. Cash flow budget (service) Complete the following cash flow budget for a service organization for the June quarter, 2018 by filling in the cells with the question marks (?). The income for the quarter is as shown in the budget. b. GST has to be added at current rate 10% General expenditure - the total for the quarter is $42 000 spread evenly over the three months. a Rent is expected to be $2500 per month. Wages and salaries -- the total gross payment for the quarter is $36 000 spread evenly over the three months and has to be paid as a net amount after allowing PAYG tax of 20%. Bank fees - the total for the quarter is $1800 spread evenly over the three months. GST input credit has to be calculated on any applicable items of expenditure using 10% rate. h. The GST remittance of $7000 for the previous quarter has to be paid in June. The PAYG remittance of $4500 for the previous quarter has to paid in May as well. The opening balance of the bank account is $20 000 The calculations for any data can be to the nearest whole dollar. The following space can be used for any calculatons. Any calculations A service organization Cash flow budget for the June quarter 2018 Apr May Jun.$ Total.s Revenue: Cash received 160000 60000 62000 182000 GST ? ? ? ? Total revenue ? 2 Less Expenditure: General 21 Motor vehicle 3000 3000 3000 90001 Rent ? ? 21 Advertising 14000 14000 14001 4200 Sub-total ? ? ? ? GST input tax credit ? ? ? Wages & salaries - admin. (net) ? Bank fees 2 ? GST remittance ? PAYG remittance Total expenditure ? Cash increase / (decrease) ? ? Opening balance bank ? Closing balance bank