Response to the following problem:
Prepare the following budgets for the 6 months ending 30 September 2014. You are required to use Excel spreadsheets
A template is available for you to use as a basis.
a) Sales budget
b) Cash Budget
c) Debtors Budget
d) Creditors Budget
e) Production Cost Budget
f) Raw Materials and finished goods Budget
g) Profit and Loss Account Budget
h) Balance Sheet Budget
Draw conclusions from your budgets and prepare a short management report using the information below.
Asian Ltd Balance Sheet as of 31st March 2014
Fixed Assets £ 200,000
Current Assets
Debtors (Feb £20,000, March £28,000) £ 48,000
Stock: Raw Materials £ 18,000
Finished Goods £ 26,000 £ 92,000
Current Liabilities
Creditors (Feb £16,000, March £20,000) -£ 36,000
Bank -£ 6,000 -£ 42,000
Net Current Asset/Working Capital £ 50,000
Net Assets £ 250,000
Finance by:
Share Captial £ 200,000
Profit and Loss £ 50,000
Total Shareholders Equity £ 250,000
Additional Information:
Fixed Assets are depreciated at 20% straight line method per year.
Purchases will be £5,000 in April, increasing by £1000 per month and paid 2 months after purchase.
Sales in April will be £20,000, increasing by £2,000 per month and paid 2 months in arrears.
Production costs per unit will be:
Direct materials £15
Direct Labour £12
Production overheads £5
Direct Labour and production overheads are paid as they are incurred.
Production units per month are 500 units.
Sales units in April are 400 units, increasing by 40 units per month.
Expenses run at £10,000 per month, paid in the month that they are incurred.