Master Budget for Voyager Consultancy

The master budget for Voyager Consultancy includes quarterly revenue receipts forecasts, cash collections forecasts, capital expense budget, expense budget, budgeted statement of financial performance, GST budget, and budget statement of cash flows. The consultancy has a credit system of payments with 60% of payment received the quarter in which they are earned and the remaining 40% earned the following month. The opening accounts receivable is $13,200 including GST. The GST is accounted for on an accrual basis. Depreciation is $700 per quarter and tax payable at 30% of net profit per quarter. Wages for the senior staff are $8,000 per quarter and junior $5,000.

You have been asked by the owner of a new consultancy called Voyager to prepare the master
budget. The consultancy consist of the owner who charges out at $68 per hour and the junior staff
who are charged out at $42 per hour. The owner has advised you that the following hours are
forecasts for each quarter.
The constancy has a credit system of payments with 60% of payment received the quarter in which
they are earned and the remaining 40% earned the following month. The opening accounts
receivable is $13,200 including GST. The GST is accounted for on an accrual basis.
1. Prepare a quarterly revenue receipts forecasts and cash collections forecasts for the next
financial year.
Hours September December March June
Senior 250 230 230 230
Junior 210 220 210 220
Voyager Co
Revenue Receipts Forecast
30-Jun
Hours Receivables
Quarter Junior Senior Total Junior
@42/hr
Senior
@68/hr Total GST Total
GST inc.
September 210 250 460 8,820 17,000 25,820 2,582 28,402
December 220 230 450 9,240 15,640 24,880 2,488 27,368
March 210 230 440 8,820 15,640 24,460 2,446 26,906
June 220 230 450 9,240 15,640 24,880 2,488 27,368
Voyager Co
Cash Collection Forecast
30-Jun
Quarter Receivables September December March June
Opening 13,200 13,200
September 11,361 17,041 11,361
December 10,947 16,421 10,947
March 10,762 16,144 10,762
June 10,947 16,421
Closing 10,947 30,241 27,782 27,091 27,183
*28,402 = September Cash (28,402 X 60%) + December Cash (28,402 X 40%)
2. The owner will purchase a new vehicle in the September quarter for $27,500. In December they
will purchase photocopiers for $5,500 and a computer system for $5,500 with an upgrade in March
for a further $2,750. Each item is inclusive of GST. Prepare the Capital Expense Budget for the
financial year.

Voyager Co
Capital Expenditure Budget
30-Jun
September December March June Total GST
Car 25,000 2,500
Photocopier 5,000 500
Computer 5,000 2,500 750
Total (net GST) 25,000 10,000 2,500 -
GST 2,500 1,000 250 - 3,750
3. The information in the table is based on source documentation from the company’s previous
operations. GST Expenses are shown.
September December March June
Motor vehicle 1,300 1,495 300 450
Printing 200 50 200 50
Electricity 600 555 500 500
Rent 4,500 4,500 4,500 4,500
Depreciation is $700 per quarter and tax payable at 30% of net profit per quarter. Wages for the
senior staff are $8,000 per quarter and junior $5,000.
Complete the expense budget, budgeted statement of financial performance, you will need to add
the non GST items to the expense budget, and the cash flow budget which has an opening cash
balance of $42,000. The opening GST liability is 2,000 and the opening PAYG tax instalment is
2,500.
Voyager Co
Expense Budget
30-Jun
September December March June
Cash expense
Motor vehicle 1,300 1,495 300 450
Printing 200 50 200 50
Electricity 600 555 500 500
Rent 4,500 4,500 4,500 4,500
Sub total GST
inclusive 6,600 6,600 5,500 5,500
GST 600 600 500 500
Net of GST 6,000 6,000 5,000 5,000
Wages senior 8,000 8,000 8,000 8,000
Wages Junior 5,000 5,000 5,000 5,000
Sub Total Cash items 19,000 19,000 18,000 18,000
Depreciation 700 700 700 700

Total 19,700 19,700 18,700 18,700
Voyager Co
Budget Statement of Financial Performance
30-Jun
September December March June Liability
Service revenue 25,820 24,880 24,460 24,880 100,040
Less Expense 19,700 19,700 18,700 18,700 76,800
Sub total 6,120 5,180 5,760 6,180 23,240
Income tax 30% 1,836 1,554 1,728 1,854 6,972
Net profit 4,284 3,626 4,032 4,326 16,268
Voyager Co
GST Budget
30-Jun
September December March June Liability
GST collected on
sales 2,582 2,488 2,446 2,488 10,004
GST Paid on
expenses 600 600 500 500 2,200
GST paid on Capital
Acquisitions 2,500 1,000 250 - 3,750
Net GST (518) 888 1,696 1,988 4,054
Voyager Co
Budget Statement of Cash Flows
30-Jun
September December March June
Opening cash 42,000 21,305 17,933 21,926
Add collections from
revenues 30,241 27,782 27,091 27,183
total cash available 72,241 49,087 45,024 49,109
less estimated cash
payments
cash payments in
expense budget 19,600 19,600 18,500 18,500
capital expenditure 25,000 10,000 2,500 -
GST payments 2,000 - 370 1,696
Tax payments 4,336 1,554 1,728 1,854
Total 50,936 31,154 23,098 22,050
closing cash balance 21,305 17,933 21,926 27,059