[ParrotBird48516]

This question follows my previous questions related to the prep of various budgets. The data provided includes monthly sales revenue, finance payments, purchases, admin expenses, selling expenses, tax expenses and shopfront upgrading.

1. The question indicates that the furniture business has a $20,000 overdraft that the bank wants paid off at the end of December (fictionally in six months time). No other info about the overdraft is given. I am not sure what to do with this figure except discuss it during an analysis section about whether the business will be able to comply with the bank's demands based on its net profits that I can calculate. I cannot see where it can be included in any budgets as no other info is provided. Is there something else I should be doing with this figure apart from a qualitative analysis?

2. Creditors/acc payable/suppliers allow one month's credit, but I can't see which accounts listed above fall into this category. The only one that may fit is 'purchases' as these are the 'suppliers' of the inventory that the business sells, but there is no info indicating the patterns of how the business pays its suppliers (ie straight away, ues he month). I guess this could be an assumption? I can't see any other accounts that fit.

3. What kind of expense is shopfront upgrading?

Sincere thanks,

Parrot

[paraclete]

This question follows my previous questions related to the prep of various budgets. The data provided includes monthly sales revenue, finance payments, purchases, admin expenses, selling expenses, tax expenses and shopfront upgrading.

1. The question indicates that the furniture business has a $20,000 overdraft that the bank wants paid off at the end of December (fictionally in six months time). No other info about the overdraft is given. I am not sure what to do with this figure except discuss it during an analysis section about whether the business will be able to comply with the bank's demands based on its net profits that I can calculate. I cannot see where it can be included in any budgets as no other info is provided. Is there something else I should be doing with this figure apart from a qualitative analysis?

2. Creditors/acc payable/suppliers allow one month's credit, but I can't see which accounts listed above fall into this category. The only one that may fit is 'purchases' as these are the 'suppliers' of the inventory that the business sells, but there is no info indicating the patterns of how the business pays its suppliers (ie straight away, ues he month). I guess this could be an assumption? I can't see any other accounts that fit.

3. What kind of expense is shopfront upgrading?

Sincere thanks,

Parrot

3 capital expenditure still included in the budget

2 your budget will show purchases paid one month after receipt but obviously all non labour expenses with exclusion of rent will fit in this category

1. assuming the business is profitable then sales and purchases have the highest impact on the ability of the company to reduce it's bank overdraft

[ParrotBird48516]

Thanks Paraclete. Very grateful.