You have a small business engaged in the retail sale of ladies and gentlemen's fashions. An...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You have a small business engaged in the retail sale of ladies and gentlemen's fashions. An accounting year-end is 31st December, and it is now 1st January 2022. Information included on the Statement of Financial Position at 31st December 2021 was as follows: Trade receivables (due to be received in January 2022) Trade receivables (due to be received in February 2022) Trade payables (due to be paid in January 2022) Closing inventories £15000 £16000 £9000 £3000 £36200 £20000 £18400 £2600 £1200 Cash at bank Share capital Retained profits/losses brought forward Dividend payable (due to be paid in January 2022) Taxation payable (due to be paid in January 2022) Shop fixtures and fittings at cost Depreciation on shop fixtures and fittings Long-term loan £10000 £5000 £24000 The shop fixtures and fittings are depreciated on a 10% straight-line basis and there is no scrap value. You are preparing a business plan for the following three months from January to March 2022. The plan will include a Cash Flow forecast, a forecast Income Statement and a forecast Statement of Financial Position. You predict the following: • You rent out office space to another local business and receive £410 per month. • Your motor vehicle running expenses will total £450 per month and are payable in the month in which they are incurred. • Other expenses will be £2500 a month payable in the month in which they occur. • You are going to buy a delivery van for the business in January at a cost of £19000 for cash. You will depreciate the van on a 20% straight-line basis. The scrap value of the van is expected to be £3000 at the end of its useful economic life. • The tax charge for the three months to 31st March 2022 will be £13738 but this will not be paid until May 2022. • A dividend of £940 was proposed to cover the three months, January to March 2022 but this will not be paid until April 2022. • Interest on the bank loan is expected to be £120 a month. • Closing inventory at 31st March 2022 is expected to be £6900. Marking Scheme: Questions 1-2: 13%, Question 3: 28%, Question 4: 29%, Question 5: 30%. Question 1 You predict that sales for January 2022 are expected to be £50000 increasing by 30% in February 2022 and by a further 7% in March 2022. Also, only 70% of your customers pay cash and the remaining 30% are given 2 month credit. Fill in the following table (Sales Working 1). All numbers must be entered as whole numbers. Enter '0" in a cell if, in any month, there are no sales. The same applies to cash sales receipts, credit sales receipts and trade receivables b/f. Sales W1 (£'s) Jan Feb March Total Total Sales Cash sales receipts Credit sales receipts Trade receivables bif Total cash receipts Question 2 In addition to the above information, you predict that purchases are expected to be 60% of sales and that you take on average 1 month credit from your suppliers. Fill in the following table (Purchases Working 2). All numbers must be entered as whole numbers. Enter "0" in a cell if, in any month, there are no credit purchases payments. The same applies to trade payables b/f. Purchases W2 (£'s) Jan Feb March Total Total Purchases Credit purchases payments Trade payables b/f Total cash paid Question 3 Prepare a cash flow forecast for the three months to 31st March 2022. Enter "0" in a cell if, in any month, there are no cash receipts / cash payments. Trendy Clothing Ltd. Cash Flow Forecast for the three months period from 1 January to 31 March 2022 CASH IN / RECEIPTS (£'s) Jan Feb March Total Sales W1 Rental Income Total Receipts CASH OUT / PAYMENT Revenue expenses Purchases W2 Dividend Other expenses Interest Motor Expenses Tax Van Total Payments Net Receipts Opening Balance Closing Balance Question 4 Prepare a forecast income statement for the three month period to 31st March 2022: Trendy Clothing Ltd. Forecast Income Statement for the three months from 1 January to 31 March 2022 Sales Revenue Less: Cost of Sales Opening Inventory Purchases Closing Inventory Gross Profit Other income Less Revenue Expenditure Other expenses Motor expenses Depreciation on fixtures and fittings Depreciation on van Total Revenue Expenditure Operating Profit (PBIT) Finance costs - Interest Paid Profit / Loss before tax Taxation Profit for the period Question 5 Prepare a forecast statement of financial position as at 31st March 2022: Trendy Clothing Ltd. Forecast Statement of Financial Position as at 31 March 2022 Non-Current Assets Net Book Value Fixtures & fittings Van Total Non-Current Assets Current Assets Inventory Trade Receivables Cash Total Current Assets Total Assets Equity Share Capital Retained profits/losses Total Equity Non-Current Liabilities Borrowings - Bank Loan Current Liabilities Trade payables Dividend payable Taxation Payable Total Current Liabilities Total Equity and Liabilities You have a small business engaged in the retail sale of ladies and gentlemen's fashions. An accounting year-end is 31st December, and it is now 1st January 2022. Information included on the Statement of Financial Position at 31st December 2021 was as follows: Trade receivables (due to be received in January 2022) Trade receivables (due to be received in February 2022) Trade payables (due to be paid in January 2022) Closing inventories £15000 £16000 £9000 £3000 £36200 £20000 £18400 £2600 £1200 Cash at bank Share capital Retained profits/losses brought forward Dividend payable (due to be paid in January 2022) Taxation payable (due to be paid in January 2022) Shop fixtures and fittings at cost Depreciation on shop fixtures and fittings Long-term loan £10000 £5000 £24000 The shop fixtures and fittings are depreciated on a 10% straight-line basis and there is no scrap value. You are preparing a business plan for the following three months from January to March 2022. The plan will include a Cash Flow forecast, a forecast Income Statement and a forecast Statement of Financial Position. You predict the following: • You rent out office space to another local business and receive £410 per month. • Your motor vehicle running expenses will total £450 per month and are payable in the month in which they are incurred. • Other expenses will be £2500 a month payable in the month in which they occur. • You are going to buy a delivery van for the business in January at a cost of £19000 for cash. You will depreciate the van on a 20% straight-line basis. The scrap value of the van is expected to be £3000 at the end of its useful economic life. • The tax charge for the three months to 31st March 2022 will be £13738 but this will not be paid until May 2022. • A dividend of £940 was proposed to cover the three months, January to March 2022 but this will not be paid until April 2022. • Interest on the bank loan is expected to be £120 a month. • Closing inventory at 31st March 2022 is expected to be £6900. Marking Scheme: Questions 1-2: 13%, Question 3: 28%, Question 4: 29%, Question 5: 30%. Question 1 You predict that sales for January 2022 are expected to be £50000 increasing by 30% in February 2022 and by a further 7% in March 2022. Also, only 70% of your customers pay cash and the remaining 30% are given 2 month credit. Fill in the following table (Sales Working 1). All numbers must be entered as whole numbers. Enter '0" in a cell if, in any month, there are no sales. The same applies to cash sales receipts, credit sales receipts and trade receivables b/f. Sales W1 (£'s) Jan Feb March Total Total Sales Cash sales receipts Credit sales receipts Trade receivables bif Total cash receipts Question 2 In addition to the above information, you predict that purchases are expected to be 60% of sales and that you take on average 1 month credit from your suppliers. Fill in the following table (Purchases Working 2). All numbers must be entered as whole numbers. Enter "0" in a cell if, in any month, there are no credit purchases payments. The same applies to trade payables b/f. Purchases W2 (£'s) Jan Feb March Total Total Purchases Credit purchases payments Trade payables b/f Total cash paid Question 3 Prepare a cash flow forecast for the three months to 31st March 2022. Enter "0" in a cell if, in any month, there are no cash receipts / cash payments. Trendy Clothing Ltd. Cash Flow Forecast for the three months period from 1 January to 31 March 2022 CASH IN / RECEIPTS (£'s) Jan Feb March Total Sales W1 Rental Income Total Receipts CASH OUT / PAYMENT Revenue expenses Purchases W2 Dividend Other expenses Interest Motor Expenses Tax Van Total Payments Net Receipts Opening Balance Closing Balance Question 4 Prepare a forecast income statement for the three month period to 31st March 2022: Trendy Clothing Ltd. Forecast Income Statement for the three months from 1 January to 31 March 2022 Sales Revenue Less: Cost of Sales Opening Inventory Purchases Closing Inventory Gross Profit Other income Less Revenue Expenditure Other expenses Motor expenses Depreciation on fixtures and fittings Depreciation on van Total Revenue Expenditure Operating Profit (PBIT) Finance costs - Interest Paid Profit / Loss before tax Taxation Profit for the period Question 5 Prepare a forecast statement of financial position as at 31st March 2022: Trendy Clothing Ltd. Forecast Statement of Financial Position as at 31 March 2022 Non-Current Assets Net Book Value Fixtures & fittings Van Total Non-Current Assets Current Assets Inventory Trade Receivables Cash Total Current Assets Total Assets Equity Share Capital Retained profits/losses Total Equity Non-Current Liabilities Borrowings - Bank Loan Current Liabilities Trade payables Dividend payable Taxation Payable Total Current Liabilities Total Equity and Liabilities
Expert Answer:
Answer rating: 100% (QA)
Question 1 Sales W1 s Jan Feb March Total Total sales 50000 65000 69550 184550 Cash sales receipts 35000 45500 48685 129185 Credit sale receipts 0 0 15000 15000 Trade receivable BF 15000 16000 0 31000 ... View the full answer
Posted Date:
Students also viewed these accounting questions
-
2. You are a business consultant in Muscat. You help your clients for setting up their business organization according to their requirements. Last week one of your client Mr. Salim requested you to...
-
The comparative consolidated statement of financial position at December 31, Year 2, and the consolidated income statement for Year 2, of Parent Ltd. and its 70%-owned subsidiary are shown below....
-
The draft statement of financial position at 30 June 2021 for Red Ltd contained the following assets and liabilities: 2021 2020 $ $ Assets Cash 1,000 7,500 Accounts receivable 84,000 76,800 Allowance...
-
Describe the graph of a constant function.
-
Provide a technical explanation of why portfolio risk gradually becomes all systematic (market) as the number of securities in the portfolio (n) gets large.
-
The following transitions occurred for London Engineering: Journalize the transactions of London Engineering. Include an explanation with each journal entry. Use the following accounts: Cash;...
-
A major problem associated with many mining projects is subsidence, or sinking of the ground above the excavation. The mining engineer needs to control the amount and distribution of this subsidence....
-
Recall from Chapter 13 that Hincapie Co. (a specialty bike-accessory manufacturer) is expecting growth in sales of some products targeted to the low-price market. Hincapie is contemplating a...
-
3. (2 points) For each of the following production functions, plug in the value shown to convert it to a short-run production function, and determine whether or not they exhibit the 2 properties of...
-
MPS, Inc. has the following unadjusted account balances as of December 31, 2022, the companys year-end: Cash: $430,000 Accounts Receivable: $2,000 Prepaid Insurance: $14,000 Prepaid Rent: $22,000...
-
Oriole, Corp. manufactures balloons that it then packages and sells throughout the country. Oriole would like to have a better understanding of its overall budgets, and has decided to implement the...
-
In 2013, a clothing factory in Bangladesh collapsed, killing 1,138 people. Some 27 global brands, including Walmart and Benetton, were using the factory. One year on, these two corporations were...
-
Scott Emmons was working for Neiman Marcus, the luxury retailer, as an enterprise architect when he realized a big gap in how their stores were handling technology. Customers were showing up with...
-
While important, rules may sometimes create more problems than they resolve. Websites like TripAdvisor are valuable for tourism, providing businesses with greater exposure. The problem is not all...
-
An unexpected ethical issue arose when Hungary, Romania, and Bulgaria joined the European Union (EU). The start of the free movement of workers across the EU meant that workers from these countries...
-
Forty-six percent of employees worry about being judged by coworkers for something they have posted on social media.38 Social networking websites can be fun. Staying in touch with old friends or...
-
A bond face value is $1000, with a 4-year maturity. Its annualcoupon rate is 8% and issuer makes semi-annual coupon payments. Theannual yield of maturity for the bond is 7%. The bond was issued on7 0...
-
Differentiate the following terms/concepts: a. Personality types and money attitudes b. Planners and avoiders c. Moderating and adapting to biases d. "Perfectible judges" and "incorrigible judges"
-
A stationary mechanical motor generates \(8.0 \mathrm{~Hz}\) water waves moving at \(3.0 \mathrm{~m} / \mathrm{s}\). What is the frequency of these waves as observed by a person in a motorboat that...
-
A military jet is flying at \(420 \mathrm{~m} / \mathrm{s}\) horizontally. Take the speed of sound to be \(344 \mathrm{~m} / \mathrm{s}\). What is the apex half angle of the conical shock wave it...
-
Redraw Fig. 5.1 in P-v coordinates. 0.1 T T 2 0,1 0,1 1 M <1 M>1 0,2 S Fig. 5.1 Illustration of Flow with Friction on T-s diagram P0,2 22 22 * M=1
Study smarter with the SolutionInn App