Financial Management Assignment 1901

This document is an assignment for Financial Management with the code 1901. It includes input data, sales collection budget, purchases budget, cash flow forecast, and projected income statement.

Running Head: FINANCIAL MANAGEMENT 1
FINANCIAL MANAGEMENT

FINANCIAL MANAGEMENT 2
ASSIGNMENT 1901 INPUT DATA
Months in a year 12
Months in a quarter (budget period) 3
SALES
Collection period
Percentage of sales which are for cash 70%
Percentage of credit sales collected in following month 90%
Percentage of credit sales collected two months after sale 10%
Estimated Monthly Sales (dollars)
April 60,000
May 55,000
June 45,000
July 40,000
Purchases as a percentage of Sales 65%
OTHER PAYMENTS
Monthly
Advertising $500
Communication Costs $700
Electricity expenses $300
Rent $4,200
Wages $6,500
Annual
Annual Insurance premium (paid in advance 2 March 2019) $3,600
BALANCE SHEET ITEMS
Cash at Bank as at 31 March 2019 $24,750
Accounts Payable for Purchases 31 March 2019 $32,500
Accounts Payable for Communication costs 31 March 2019 $740
Accounts Payable for Electricity 31 March 2019 $280
Accounts Receivable at 31 March relating to March 2019 $14,000
Accounts Receivable at 31 March relating to February 2019 $1,600
NON-CURRENT ASSETS
Cost Estimated Residual
Life Value
Furniture & Fittings $35,000 10 $0
Office Equipment $25,000 5 $5,000

FINANCIAL MANAGEMENT 3
SALES COLLECTION BUDGET
March April May June Quarter
$ $ $ $
Revenue (Total Budgeted Sales in $s)
$60,00
0 $55,000 $45,000 $160,000
Cash Sales
$42,00
0 $38,500 $31,500 $112,000
Credit Sales
$18,00
0 $16,500 $13,500 $48,000
Cash Collection
Cash Sales
$42,00
0 $38,500 $31,500 $112,000
Month after sale
$14,00
0 $16,200 $14,850 $31,050
Two months after sale $1,800 $1,800
Total
$56,00
0 $54,700 $48,150 $158,850
PURCHASES BUDGET
March April May June Quarter
$ $ $ $ $
Purchases
$36,00
0 $35,750 $29,250 $101,000
Payment for purchases
$32,50
0 $36,000 $35,750 $104,250
NON-CURRENT ASSETS Schedule
Depreciation
Quarter
$
Furniture & Fittings $10,500
Office Equipment $12,000
Total $22,500

FINANCIAL MANAGEMENT 4
Lucky Star
Cash Flow Forecast
Quarter ending 30 June 2019
NOTE: Depending on how the cash flow is prepared, not all pink and blue cells may need
entries
April May June Quarter
$ $ $ $
Cash received from customers 56000 54700 48150 $158,850
Cash paid for
Inventory purchases $32,500 $36,000 $35,750 $104,250
Rent $4,200 $4,200 $4,200 $12,600
Advertisement $500 $500 $500 $1,500
Wages $6,500 $6,500 $6,500 $19,500
Communication $740 $700 $700 $2,140
Electricity $280 $300 $300 $880
Insurance
$44,720 $48,200 $47,950 $140,870
Net cash flow from operating activities $11,280 $6,500 $200 $17,980
Cash paid for purchase of property $0 $0 $0 $ -
Cash paid for purchase of equipment $0 $0 $0 $ -
Net cash flow from investing activities $0 $0 $0 $ -
Net cash from financing activities $0 $0 $0 $ -
Net Cash Inflow (outflow) from operations $11,280 $6,500 $200 $17,980
Beginning cash balance $24,750 -$13,470 -$6,970 $4,310
Ending cash balance -$13,470 -$6,970 -$6,770 -$27,210

FINANCIAL MANAGEMENT 5
Lucky Star
Projected Income Statement
Quarter ending 30 June 2019
Quarter
$ $
Revenue
Sales $158,850
Less:
Cost of Goods Sold $104,250
Gross Profit $54,600
Less Expenses
Wages $6,500 $19,500
Advertising Costs $500 $1,500
Communication costs $700 $2,100
Electricity Expenses $300 $900
Insurance $3,600
Rent $4,200 $12,600
Depreciation $22,500 $22,500
Total expenses $59,100
Net Profit -$4,500
Net Profit if $16,750
Ending Cash Balance if -$ 6,770