The following are the account balances for Nguyen Ltd as at 31st December 2018 Mortgage $ 210,000.00 Inventory $ 60,000.00 Owners Equity $ 360,000.00 Investments (Shares) $ 11,000.00 Plant (net) $ 61,000.00 Land and Building $ 327,629.00 Accounts Payable $ 31,000.00 Cash at Bank $ 5,000.00 Accounts Receivable $ 136,371.00 Nguyen Ltd wants budgets prepared for the next six months. The expected credit sales for the six months ending 30th June 2019 (there are no cash sales) are as follows: Estimated Sales (units) Jan Feb March April May June July Assuming poor Market 15,000.00 10,000.00 8,000.00 7,000.00 10,000.00 10,000.00 10,000.00 Accounts Receivable are collected in the following pattern: 60% of accounts are settled in the first month following the month of sale 3% discount will be available to 25% of those paying within the first month following the month of sale 39$ of accounts are settled in the second month following the month of sale 1% are bad debts The accounts receivable balance as at December 31, 2018 included the December sales ($80,500) and the accounts receivable brought forward from the November sales of $146,250. Cost estimates and revenues are details below: $ per unit $ per unit Selling price 10 Advertising 2,500 Inventory (Purchases) 8 Administration 2,100 Variable selling expenses 0.75 Depreciation (Plant) 1,500 Interest Payments 4,100 In addition, dividends of $400 are expected to be received in May 2013, from investments. The sale of an investment in June 2019 should result in proceeds of $12,100. All expenses are paid for when incurred except for purchases of inventory, 60% of which are paid for in the month of purchase and the balance in the following month. Closing balance of inventory are to be kept at 50% of the following months sale (units). During this period no purchases or sale of plant or property is anticipated. Develop the following budgets of Nguyen Pty Ltd using the information provided in the case study: Budgeted Income statement for the six months ending 30 June 2013, showing net profit assuming poor market conditions Monthly cash budget for the six month period January – June 2013, assuming poor market conditions Budgeted balance sheet as at 30 June 2013 assuming poor market conditions. Submit your completed budgets with this assessment.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The following are the account balances for Nguyen Ltd as at 31st December 2018
|
Mortgage |
$ 210,000.00 |
Inventory |
$ 60,000.00 |
|
Owners Equity |
$ 360,000.00 |
Investments (Shares) |
$ 11,000.00 |
|
Plant (net) |
$ 61,000.00 |
Land and Building |
$ 327,629.00 |
|
Accounts Payable |
$ 31,000.00 |
Cash at Bank |
$ 5,000.00 |
|
|
$ 136,371.00 |
|
|
Nguyen Ltd wants budgets prepared for the next six months. The expected credit sales for the six months ending 30th June 2019 (there are no cash sales) are as follows:
|
Estimated Sales (units) |
Jan |
Feb |
March |
April |
May |
June |
July |
|
Assuming poor Market |
15,000.00 |
10,000.00 |
8,000.00 |
7,000.00 |
10,000.00 |
10,000.00 |
10,000.00 |
Accounts Receivable are collected in the following pattern:
- 60% of accounts are settled in the first month following the month of sale
- 3% discount will be available to 25% of those paying within the first month following the month of sale
- 39$ of accounts are settled in the second month following the month of sale
- 1% are
bad debts
The accounts receivable balance as at December 31, 2018 included the December sales ($80,500) and the accounts receivable brought forward from the November sales of $146,250. Cost estimates and revenues are details below:
|
|
$ per unit |
|
$ per unit |
|
Selling price |
10 |
Advertising |
2,500 |
|
Inventory (Purchases) |
8 |
Administration |
2,100 |
|
Variable selling expenses |
0.75 |
Depreciation (Plant) |
1,500 |
|
|
|
Interest Payments |
4,100 |
In addition, dividends of $400 are expected to be received in May 2013, from investments. The sale of an investment in June 2019 should result in proceeds of $12,100.
All expenses are paid for when incurred except for purchases of inventory, 60% of which are paid for in the month of purchase and the balance in the following month. Closing balance of inventory are to be kept at 50% of the following months sale (units). During this period no purchases or sale of plant or property is anticipated.
Develop the following budgets of Nguyen Pty Ltd using the information provided in the case study:
Budgeted Income statement for the six months ending 30 June 2013, showing net profit assuming poor market conditions- Monthly
cash budget for the six month period January – June 2013, assuming poor market conditions - Budgeted
balance sheet as at 30 June 2013 assuming poor market conditions.
Submit your completed budgets with this assessment.
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