Financial Budget: Income Statement, Balance Sheet, Cash Flow

ASSESSMENT -3:
FINANCIAL BUDGET

Contents
Part A: Income Statement and Balance sheet...........................................................................2
a) Budgeted Income statement for the quarter ended 30 September.........................................2
a) Budgeted Balance Sheet as at 30 September..................................................................3
Part B: Statement of Cash Flow........................................................................................... 7
References:.................................................................................................................... 9

Part A: Income Statement and Balance sheet
Financial statements are an important part of the business and helps in summarizing and
presenting the financial information to the users of the financial statements. The companies are
required to prepare and present the financial statements at the end of every reporting period. The
financial statements includes the income statement, balance sheet and the statement of cash flow.
The income statement shows the summary of incomes earned and expenses incurred during the
period. It shows the net profit earned or loss incurred during the period. Similarly, the balance
sheet shows position of assets and liabilities as on the reporting date. It provides the bird eye
view of the assets, liabilities and equities. It helps in managing the business and taking major
financial decisions. It bifurcates the assets and liabilities into current and non-current on the basis
of periodicity. Generally, the items which falls within 12 months from the reporting date are
termed as current and which falls beyond after 12 months are treated as non-current.
a) Budgeted Income statement for the quarter ended 30 September
In the given case, we are asked to prepare the budgeted income statement of the company.
Laura Golarsa
Budgeted Income Statement for the quarter ended September 30
Description Amount
Sales $52,500
Less: cost of goods sold
Opening inventory $4,000
Purchases (note-a) $29,450
Closing inventory -$5,000 $28,450
Gross margin $24,050
Operating expenses
Marketing expense (15% of sales) $7,875
General & administration expense (5% of sales) $2,625
Motor vehicle running expense $775
Depreciation - motor vehicles $3,600
Depreciation - plant & equipment $660
Bad debt expense (refer Wn-2) $840