1. A large computer company repays its loan in monthly $10,000 instalments. 25% of this is the interest component, thus $2500 is paid monthly in interest. Hence, $7500 is the monthly principle and $2500 is the interest.

Can you please confirm if these components appear on a budgeted income statement? I have had a look at actual income statements and balance sheets and it seems that the loan is on the balance sheet (assuming principle) as a liability and there are interest expenses on the income statement. Does this transcend to budgeted income statements? Is the principle and its interest separated like this?

2. Admin expenses have been provided that are inclusive of depreciation. I understand that depreciation expenses appear on income statements and accumulated depreciation appears on the balance sheet. However, should this full amount appear in the budgeted income statement because the depreciation figure (quite a big chunk) has been stipulated as being part of admin expenses and not accumulated deprecation?

Thanks,

Parrot

1. A large computer company repays its loan in monthly $10,000 instalments. 25% of this is the interest component, thus $2500 is paid monthly in interest. Hence, $7500 is the monthly principle and $2500 is the interest.

Can you please confirm if these components appear on a budgeted income statement? I have had a look at actual income statements and balance sheets and it seems that the loan is on the balance sheet (assuming principle) as a liability and there are interest expenses on the income statement. Does this transcend to budgeted income statements? Is the principle and its interest separated like this?

2. Admin expenses have been provided that are inclusive of depreciation. I understand that depreciation expenses appear on income statements and accumulated depreciation appears on the balance sheet. However, should this full amount appear in the budgeted income statement due to the fact that the depreciation figure (quite a big chunk) has been stipulated as being part of admin expenses and not accumulated deprecation?

Thanks,

Parrot

In all honesty my response is what! surely you have progressed far enough in your studies to be able to distinguish between capital and non capital transactions and between debits and credits