Budgeting
Current Assets:
Inventories (Stock) 43,000
Account Receivable 16,000
Cash at bank 12,500
71,500
Fixed Assets:
Shop Equipment 18,000
Less: Accumulated Depreciation 4,000 14,000
Delivery Vehicles 15,000
Less: Accumulated Depreciation 6,000 9,000 23,000
Total Assets 94,500
Current Liabilities:
Account Payable 18,000
Net Assets 76,500
John has provided these estimates for the coming year.
I. Sales to be RM 434,000
II. Net Profit to be 8% of the sales
III. Cost of good sold to be 54% of sales
IV. Account receivable will be equal to 14 days sales. The business operates 310 days
Per year
V. Account payable will increase by 6%
VI. Cash at bank will be RM27,740
VII. Depreciation of 7.5% per annum will be charged on shop equipment and 15% on
The delivery vehicles
VIII. Inventory will decrease by 8%
IX. John will draw RM 24,000 from the business.
Prepared following budgets:
a) Cost of Goods Sold Budget for 2006
b) Profit & Loss Budget for the year 2006
c) Balance Sheet Budget for the year ended 30th June 2006
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